Astral Poly Technik Ltd – BSE:532830

Real Estate/Construction sector is a huge area in India and the potential going forward is enormous. Plumbing and clean water transportation is a very important area and crucial part of a construction project. Repairing of plumbing work is a very troublesome and costly affair and hence one won’t compromise on this front.

The plumbing industry in India is undergoing a smart change. Earlier, GI Pipes used to dominate the market but now PVC and CPVC pipes are fast replacing the GI Pipes. CPVC resin is most hygienic compound for water transportation and is resistant to corrosion. Hence as awareness and quality consciousness is increasing, more and more people are adopting CPVC pipes for plumbing needs.

Lubrizol (earlier B F Goodrich a Fortune 500 Company, USA) has been a leader in development of CPVC and they hold the patent for the same. Astral Poly is the first licensee of Lubrizol of USA and have a techno-financial joint venture with Specialty Process LLC of USA.Company has done really well over the last 5 years and has grown at a CAGR of almost 50%. The company has a first mover advantage in India and the competition might remain limited.

Snapshot of their performance:


For FY 2011, the gross sales should cross 400 Cr mark and the capacity should increase to 45,000 MT (was expected to come up by Dec 2010 end).

Future growth prospects:

Looking at the product potential, the market potential seems big enough for this company and hence one may expect growth rates in the range of 20-25%+ for next few years. Also, the company has been aggressive to keep introducing new products and take them PAN India. During this year company would be introducing Blazemaster Fire Sprinkler System and Manhole Inspection Chambers.

Valuations at CMP of 122:

  • For 2011, company is expected to do a turnover of 380 Cr vs 300 Cr last year.
  • Stock is trading at about 9 times expected FY 2011 earnings.

Looking at the growth prospects it seems to be a very interesting long-term investment. Please post your views in comments regarding the company.

Astral Poly Technik Financials:

Astral Poly Technik Website | Astral Poly Technik Annual Report @ Dalal Street Reporter

17 thoughts on “Astral Poly Technik Ltd – BSE:532830”

  1. Hi, since this scrip is related to the realty sector it has corrected by more than 30% from the highs of the year. The realty sector has taken a beating and I am not sure when it will recover. DLF, NCC, Jaypee…all are trading way below their highs. The reasons attributed are problems in timely execution, corporate governance issues, higher cost of fund etc. This sector might remain choppy for long.
    And since the builders are under extreme cost pressure will they spend money on a more expensive plumbin solution?

    1. Hi Vinod,

      The price difference between Astral’s and others product is not too much. Also plumbing expense is not a major portion of a construction cost.

      Still, If there is some short term slowdown and the price of the stock falls, it would be an opportunity to buy more on sharp declines, if any.


      1. Hi Ayush,

        Few Qs:
        1. What is the customer awareness of the company and how does the company plan to increase its marketshare?

        2. As seen from a customer’s perspective, a pipe would be a commodity. Would the company be able to charge a premium because it is anti-corrosive?

        3. (Related to #2) What would enable the company to increase its margins going forward?

        4. What are the triggers for the price increase?

        5. Do companies like Astral has some sort of long term purchase agreement from builders or do the retail customers constitute bulk of the sales?

        6. Despite 21 and 33% increase in profits in the last 2 quarters, the stock price is has crashed in Sep’10 and has not since recovered. Any reason?

        1. Hi Madhav,

          I don’t have direct confirmed answers to the queries above…but few general thoughts are:

          1. Awareness will increase if the product is indeed better than others.

          2. In developed countries, CPVC is a preferred choice as its a better product. Same should happen here.

          3. Can’t say of increase in margins. If they can continue to maintain the current margins and grow – it will be great.

          4. Don’t know

          5. Don’t know

          6. I think this is the opportunity 🙂


  2. I’m still learning from you, but I’m improving myself. I absolutely love reading all that is posted on your site.Keep the information coming. I liked it!
    share market

    1. Yes, competition is increasing. But on the positive, the space itself is growing very fast…as per a recent concall by Astral’s mgmt, they expect growth of 30%+ in H2. Also they are introducing new products for which they have exclusive arrangements.

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