We had recently posted about Astral Polytechnik Ltd. (APL). We had discussed about the shift taking place in the Indian plumbing market from GI Pipes to CPVC and Astral’s leadership position in the same. The feedback and further research on this stock has been remarkable.
Our friend – Donald Francis, made a company visit and had a Management Meet to get a better understanding. Few highlights:
We see us growing at 30-35% CAGR for the next few years. If we execute well, a Rs. 1000 Cr turnover is achievable within the next 3 years.
We are looking to expand to 70,000 MT by this year end.
The availability of the CPVC compound (other than Lubrizol) is a key constraint.
Please check out the complete report (requires free login) to get a in-depth understanding of the company and the potential ahead.
Key Takeaways from his meeting:
- The opportunity for the CPVC players is huge as the acceptance and usage of CPVC is increasing fast in the plumbing industry.
- As the CPVC compound is restricted (only 3 licenses have been given by Lubrizol in India), Astral will continue to have a advantage.
- The company targets to grow @ of 30-35% for next few years.
- New products being developed for launch – Blazemaster etc have high potential and Astral will enjoy an exclusive period for them.
- The company already has sufficient land space to carry out expansions for next 2-3 years. Astral plans to increase capacity from currently 45,000 MT to 70,000 MT by year end.
- Company aims to maintain operating margins in the range of 13-15% on an annual basis.
The stock has remained quite firm and has been steadily rising despite lot of weakness in the overall market. We feel that with more discussion and discovery of the stock and potential ahead, it may continue to do well. Its not easy to come across stock ideas having products with strong growth visibility. One should continue to hold the stock and accumulate on declines.