Astral Poly Technik Ltd - Results above our expectations - Nirmal Bang

For the Quarter, Revenues grew 52.4% YoY at Rs.152.6 crore on the back of 6% price hike taken on various products during the quarter and 46% growth in volumes. The revenue growth is well ahead of our projections and company's guidance.

EBIDTA margins have improved by 55 bps YoY to 13%. Margins are not comparable on a QoQ basis since Q4FY12 quarter contained benefits of lower raw material cost due to rupee appreciation during that period.

During the quarter the company incurred exceptional loss of Rs.2.2 crore due to changes in the exchange rates on repayment of loans.

Depreciation increased 39% YoY at Rs.4.3 crore.

Tax rate for the quarter stood flat YoY at 20%.

PAT grew 38.5% YoY on the back of higher revenues and stable margins.

Adjusted PAT grew 60% YoY to Rs.9.5 crore during the quarter.

CPVC and PVC contribution was at 60:40 respectively.

MTM loss arising out of foreign currency borrowings due to currency fluctuations stood at Rs. 12.35 crore during the quarter. The same was not given any effect in the current quarter's results and would be taken into account in the end of the year.

Guidance: On the back of high demand of its products, the company has guided for 25-30% growth in revenues in FY13E with stable margins.

Valuation and Recommendation

Astral has been growing at a CAGR of 40% + in the past 5 years. Company continues to enjoy market leadership in the CVPC products, plans to expand capacity and is adding many new products in the coming years. We feel the PVC proportion could reduce with upcoming CPVC products and profitability is likely to improve.

At CMP, the stock is trading at 9.3x its FY13E earnings and we continue to remain positive about the future prospects of the company with a HOLD recommendation.

Source : Equity Bulls

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