🪞At a Glance
Astral has been India’s blue-eyed boy of CPVC pipes and fittings, with a side hustle in adhesives. But is this midcap darling now leaking value at 81x earnings? Revenues are up, margins holding, but stock is down 31% YoY. Let’s flush out the facts, segment by segment.
🏗️ 1. What Astral Actually Builds – More Than Just Pipes
🚰 Plumbing & Infrastructure (72% of revenue)
- CPVC, PVC, lead-free plumbing systems
- Drainage, water tanks, bathware, conduit pipes
- Leader in CPVC market; sales volumes grew 47% from FY22–FY24
- Price realizations dropped 16% as raw material prices cooled
🧪 Adhesives & Sealants (28%)
- Brands: Resinova, Seal It
- Growing fast, especially in Tier 2/3 cities
- This is the Fevicol-fighter division
🧱 Newer verticals:
- Bathware & Sanitaryware: Early-stage
- Water tanks: High-margin B2C bet
🎯 Two-legged growth engine: Core plumbing + FMCG-style adhesives
📊 2. 5-Year Financial Recap – Solid Pipes, Mixed Taps
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) | EPS (₹) |
|---|---|---|---|---|
| FY21 | 3,176 | 408 | 20% | 15.1 |
| FY22 | 4,394 | 490 | 17% | 18.1 |
| FY23 | 5,158 | 472 | 16% | 17.0 |
| FY24 | 5,641 | 546 | 16% | 20.3 |
| FY25 | 5,832 | 519 | 16% | 19.5 |
📈 Revenue CAGR (FY21–25): ~16%
📉 PAT CAGR: ~6.2%
🤷♂️ So much capex, but EPS hasn’t really lifted off.
🧮 3. Quarterly Numbers – Strong Exit in FY25
| Quarter | Sales (₹ Cr) | Net Profit (₹ Cr) | OPM (%) |
|---|---|---|---|
| Jun ’24 | 1,384 | 120 | 16% |
| Sep ’24 | 1,370 | 109 | 15% |
| Dec ’24 | 1,397 | 113 | 16% |
| Mar ’25 | 1,681 | 178 | 18% |
🔄 Sales up 21% QoQ in Q4FY25
📈 Highest quarterly profit in 2 years
🧽 Adhesive margins also cleaned up after raw material price correction
📐 4. Efficiency, Return Ratios & Debt
| Metric | Value |
|---|---|
| ROCE | 20% |
| ROE | 15% |
| Net Debt | ₹233 Cr (negligible) |
| Working Capital Days | 30 |
| Inventory Days | 105 |
✅ Super-efficient ops
✅ Healthy cash flow (₹630 Cr from ops in FY25)
🧾 Growing CWIP (₹116 Cr) shows continued capex
📉 5. Valuation Zone – From Midcap Darling to Midcap Overkill?
- CMP: ₹1,564
- EPS (FY25): ₹19.5
- P/E: 80.9x
- P/B: 11.6x
- Dividend Yield: 0.24%
🤯 Astral trades like a tech unicorn, not a pipe maker
🧪 Adhesive biz is high-margin, but still a minority contributor
🚨 Price-to-reality mismatch?
🔬 6. Peer Comparison – Supreme, Finolex, Time Tech
| Company | P/E | ROCE | OPM | 1-Yr Return |
|---|---|---|---|---|
| Supreme Inds | 64x | 22% | 20% | +10% |
| Finolex Inds | 31x | 10% | 10% | -8% |
| Time Tech | 26x | 17% | 15% | +20% |
| Astral | 81x | 20% | 16% | -31% |
🥇 Top-tier efficiency
💸 Bottom-tier price performance
🤨 When you price perfection, even good news causes panic selling
🧠 7. What’s Working and What’s Not
✅ Positives
- Near-zero debt
- Efficient working capital
- Consistent OPM above 15%
- Adhesives building brand moat
- Astral = “CPVC” brand recall in India
❌ Risks
- Valuation extremely stretched
- Adhesive segment needs scale to matter
- Growth has slowed to 3% TTM
- P/E expansion not sustainable without profit acceleration
🎯 8. EduInvesting Fair Value Range (w/ Rationale)
EPS: ₹19.5
Fair P/E Range: 35x (fair case) to 50x (optimistic, sector leader)
| Scenario | EPS | P/E | Fair Value |
|---|---|---|---|
| Fair Case | ₹19.5 | 35x | ₹683 |
| Bull Case | ₹19.5 | 50x | ₹975 |
🚦 Edu FV Range = ₹680 – ₹975
🔻 CMP = ₹1,564
😬 Downside risk of 35–55% if market corrects P/E obsession
🧠 TL;DR – Not a Bad Company, Just an Overpaid One
- 💪 Business? Excellent.
- 💧 Pipes & adhesives? Profitable.
- 📊 Margins? Stable.
- 💸 Price? Not justified.
Unless Astral invents a pipe that pumps profits into EPS directly, the 81x valuation isn’t sustainable.
This isn’t a “dump now” stock. It’s a “watch like a hawk and wait for correction” one.
✍️ Written by Prashant | 📅 June 18, 2025
Tags: Astral Pipes stock analysis, CPVC pipe companies, Adhesive stocks India, Astral Ltd fair value, Astral Ltd valuation, Astral vs Supreme, EduInvesting plastic sector review, overpriced midcap stocks
