- 12 Nov 2022
- ICICIdirect Research
Astral's Q2FY23 performance came in below our estimates
ASTRAL - 1919 Change: -11.45 (-0.59 %)News:
Revenue declined marginally by 2.4% YoY to Rs 1171.6 crore (vs I-direct estimate: Rs 1310.2 crore) mainly due to subdued demand for piping products. YoY. Astral’s plastic piping segment reported a decline in revenue of ~11% YoY to Rs 836 crore (Vs I-direct estimate Rs 918 crore). On the Paints & Adhesives front, company has recorded a revenue growth of ~27% YoY to Rs 335.5 crore (vs I-direct estimate: Rs 366.3 crore)
- Gross margin declined by ~174 bps YoY (94 bps QoQ) mainly due to usage of high cost inventory. Inventory loss for the quarter came in at Rs 45 crore. This has led to overall fall in EBITDA margin by ~534 bps to 12.3% in Q2FY23 (lower than I-direct estimate of 13.8%)
- PAT came in at Rs 74.6 crore, down ~48% YoY (lower than I-direct estimate of Rs 98.5 crore) tracking sharp fall in EBITDA margin as well as higher interest outgo
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We believe that Astral reported a dismal performance in Q2FY23. Decline in revenue is due to subdued demand as well as delay in price hikes. Sharp reduction in PVC prices has also led to inventory losses causing EBITDA margin to dip by 534 bps on a YoY basis. We await management commentary on company’s future demand outlook and EBITDA margin movement going forward.Impact:
Negative