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Research
Astral Poly Technik - Blip in EBITDA margins albeit robust outlook - Ventura
Posted On : 2012-11-19 00:19:40( TIMEZONE : IST )
Outlook
Robust topline and EBITDA growth (backed by higher volumes) albeit a slight blip in margins were the key highlights of Q2FY13 results of Astral Poly Technik. Reported PAT grew only 12% yoy due to forex loss of Rs 5.4 crore. We expect the revenues EBITDA and PAT to grow at 24.3 %, 18.97% and 26.5% CAGR from FY12- FY14E. The growth would be volume led given the increase in demand for its products and initiatives taken by the company like ad spend and in film advertising to create awareness for its products At the CMP of Rs 363 the stock is quoting at P/E of 15.9x FY13E and 13.4x FY14E consensus earnings We have a Hold rating with target price of Rs 394 (14x FY14E) . Investors can add the stock at every decline as outlook for the company remains robust.
Key Takeaways
- The company revenues grew at a healthy 48% yoy to Rs 201 crore on account of higher volumes . On the back of robust sales, EBITDA grew 45.8% yoy to Rs 23.9 crore. EBITDA margins however contracted by 10 bps on yoy and came in 11.9% for Q2FY13.
- The company reported forex loss of Rs 5.4 crore during the quarter. In H1FY13,the total forex loss stood at Rs 7.6 crore. As the result of forex loss, reported PAT grew only by 12.2% yoy to Rs. 12.7 crore.
- Production during the quarter increased by 12% on yoy basis to 10,997 MT.
- Other expenses for the quarter increased 68% yoy as the company boosted its advertising investments in line with the strategy of expanding brand visibility. The company stated in the concall that new TV ad campaign would begin in second half of November and the company has tied up with Salman Khan's Dabangg - 2 for infilm advertising.
- Astral has started production of blendable CPVC in October 2012 and will begin indigenous production of solvent cement in Q3FY13. The company's new products launches are on track. The company has guided for ~ Rs 40-45 crore as capex in FY13. In H1FY13, the company has already done capex of Rs 19 crore.
