We retain our Buy rating on Astral with a revised PT of Rs. 1,800, driven by the company’s steady performance, strategic capacity expansion, and continued focus on value added products.
FY25, sales stood at Rs. 5,832.4 crore, up 3.4% y-o-y, while the EBITDA margin remained flat y-o-y at 16.9%. Despite challenges in the polymer industry, plumbing volumes grew 3.4% y-o-y to 2,27,090 MT.
The Hyderabad plant is now fully operational and manufactures a complete range of pipe products. The Kanpur plant is nearing completion and is expected to become fully operational by the end of FY26. The company plans to add two adhesives plants in Dahej in FY26.
Astral is targeting low double-digit volume growth in the plumbing segment for FY26, with an EBITDA margin of 16-18% for plumbing and 14-16% for the adhesives business.
Consolidated revenue for FY25 stood at Rs. 5,832.4 crore, up 3.4% y-o-y, with the EBITDA margin flat at 16.9%. Revenue from the plumbing segment rose modestly by 1.3% y-o-y to Rs. 4,196.3 crore, with an EBITDA margin of 18.9% (vs. 18.3% in FY24), supported by a 3.4% y-o-y growth in sales volume to 2,27,090 MT, driven by favorable product mix and premium pricing, despite volatility in polymer prices. The adhesives and paints business delivered revenue of Rs. 1,636.1 crore, up 9.1% y-o-y, though the EBITDA margin stood to 11.9% (versus 13.5% in FY24). The UK adhesives business faced temporary operational challenges, but the company expects improvements in growth, value, and profitability over the next 2–3 quarters. Meanwhile, the India adhesives business continues to perform well in terms of both growth and margins and is now the second-largest industrial adhesive company in India and the first to cross Rs. 1,000 crore in sales. The bathware segment grew by 50% y-o-y, reaching ~Rs. 130 crore, but is yet to break even. The paint business is profitable at the EBITDA level, even though growth has been slow; it was launched in Gujarat and Rajasthan and will expand gradually to other states, while continuing to sell “Gem Paints” in the southern region. The company has also opened an overseas office in Dubai to push exports of both pipes and adhesives to the Middle East, Saudi Arabia, Africa, and parts of Europe, with a focus on value-added products.
Capacity expansion strategy: During FY25, the company increased its plumbing production capacity from 3,34,040 MT to 3,81,957 MT, marking a 14% increase. Astral continues to invest in new manufacturing facilities, even though current plant utilization remains around 55–65%. The key objective is to decentralize operations and strengthen regional supply chains across India. The company has invested approximately Rs. 1,000 crore in capacity expansion over the last two years, with full benefits expected to materialize over the next five years. The Hyderabad plant is now fully operational, while the Kanpur plant is expected to be fully operational by FY26-end. Additionally, the Dahej plant is operational and manufactures epoxy and white glue chemistries. Astral plans to add two more plants at Dahej to expand its product offering.
Future outlook: With implementation of BIS norms deferred to December 2025 and the ADD yet to be implemented, near-term volume growth may remain modest. However, the outlook remains positive, supported by stabilizing PVC prices and policy tailwinds such as the Jal Jeevan Mission. Astral’s continued focus on value-added products, regional capacity expansion, and rising demand across infrastructure, agriculture, and housing is expected to drive margin improvement and support sustainable growth from FY26 onwards.
CPVC and PVC Industry: The CPVC industry currently stands at around 2.5 lakh tonnes, accounting for approximately 5% of the PVC industry. Astral expects CPVC to grow at a rate of 10–15%, and notes that if fire-rated CPVC receives regulatory approval, it could unlock significant additional growth. The PVC industry is projected to grow by 6–7% annually. Astral is a market leader in CPVC, with an estimated 25–30% market share.
Our Call
Valuation – Retain Buy with a revised PT of Rs. 1,800: We retain our Buy rating on Astral with a revised price target of Rs. 1,800, supported by its strong fundamentals, expanding product portfolio, and long-term growth drivers. PVC prices have remained largely stable, and rising infrastructure activity, coupled with urban and rural housing demand, continue to create a favorable operating environment for the company. Astral continues to strengthen its presence in value-added product categories like Fire Pro, OPVC, and valves, while also scaling up new businesses such as plastic tanks, paints, faucets, and sanitaryware—key to its long-term diversification strategy. We estimate a 15%/17%/21% CAGR in consolidated revenue/EBITDA/ PAT over FY2025–FY2027E. The stock currently trades at 60.8x/52.3x FY2026E/FY2027E EPS, offering a compelling long-term investment opportunity.
Key Risks
The company’s profitability is highly vulnerable to the volatile fluctuations in raw material (polymer) prices