Prices increased at Astral effective 28 January 2013 approx 7% .
This might have lead to slightly subdued performance last qtr on EBIDTA front.The co does has pricing power.
Can any body share the concall detail of Astral ?
Met one Astral dealer (in bangalore) and asked about Ashirwad vs. Astral and his response was -
both are No.1 and good competitor with best quality.
Ashirwad has done good advertising (by putting banner/hordings next to big companies) and has got first mover advantage by word of mouth (he has given me one example saying even though Berger,Nerolac are better but people will come and ask for Asian paints due to good ads/people awareness towards a brand).
His words were Astral is doing big Advertisment now (Could see 3 big bannerin front of his small shop) and will be better in coming days.
comaring q2 and q3 of fy 13 for astral the sales in q3 are 206 crores and in q2 are 200 crores ( an increase of 6 crores ) however the raw material prices for q3 are 140 crores and for q2 120 crores ( an increase of 20 crores ) .
why have the raw material prices gone up in a quarter (any reasons )
regards
ranvir
Hi,
Can anyone explain how price increase in Jan effect last qtr EBITDA?
Vivek…do you mean that they have not been able to increase prices in time and higher expenses gave lower earnings?
Some big time buying going on in Astral
Recent rupee appreciation can help the co a lot. But slowdown In RE is negatively impacting the growth.
Hi With reference to the below article, have been meaning to do a comparison and finally got around to it. http://www.business-standard.com/article/companies/belgian-mnc-close-to-acquiring-ashirvad-pipes-in-150-mn-deal-113010700107_1.html The article talks of a value for Ashirwad of USD 150 mn i.e. Rs. 800 cr. Did a small compilation on Astral and Ashirwad (some rounding off for ease of reading) : Astral Ashirwad Sales (FY12 nos. available in article) 625 cr 600 cr Net Profit 40 cr 50 cr Distributors 350 1200 Dealers 10000 14000 Capacity (PVC) 65000 MT 48000 MT No. of licenses from Lubrizol 4 1 Market cap 800 cr 800 cr Comments: It appears that both companies are of almost same size in sales and profits and enjoy same valuations ie market cap for Astral and offered value for Ashirwad. Ashirwad has lower capacity but higher sales which appears due to higher market penetration by having more dealers/distributors. [As a side note, this indicates that there is scope for Astral to increase sales by spreading its higher capacity amongst more dealers/distributors.] But Astral has higher capacity and more no. of licensed products. Though its profitability appears slightly lower (net margin of 6.4% vs 8.3% for Ashirwad), I would believe that it should enjoy higher valuation than Ashirwad due to the other factors.
sorry for the above. really need to get down to doing something about the formatting issues i face. anyway, have attached word file for ease.
astral-vs-ashirwad.docx (14.4 KB)
Good news on Blazemaster is finally out. CPVC based fire sprinklers have been finally approved by BIS and the same has been included in new standard. The BIS guide containing this standard has been finally published by Security Printing Press n now all interested users are free to use CPVC based fire sprinklers where Blazemaster has a virtual monopoly. Recently Mariott Hotel had taken a special permission n installed Blazemaster at their premises
This implies a 1000 crore market has opened up for Astral N several years of effort have finally borne fruit. No wonder HSBC purchased 1.43 lacs shares on 6 feb 2013.
Belgian Firm Aliaxis Acquires Major Stake In Ashirvad Pipes
Check the link:
&
Astral remains steady due to
-
Indias no 1 MF HDFC has purchased 1.5 Lacs shares last month . It seems to be their first buy.
-
Astrals largest holder after Promoters HSBC increases its total stake to 10% last month itself.
-
it’s biggest rival Ashirwad acquired by the Belgian MNC at market cap of 1600 crores
-
Blazemaster approval by BIS implies opening of a market as large as FlowGuard with the difference being monopoly of astral for next 5 years.
Seems a decent buy at CMP .views Invited.
Astral closes this year with appraox figures of 950 Cr vs 650 Cr for last year. Target for next year is 1500 Cr.Blazemaster has started blazing so target shud be achievable.
Story remains intact . Shud be a primpe pick at any fall or even CMP
I second you Vivekji,
I feel Astral has an excellent future prospective with good management, good R&D backing from a foreign partner, and a huge (and untapped in some segment) expanding market in front of it. If things go well, this will get its well-deserved place in indian large cap.
I am thinking it to make my 1st/2nd largest holding. Yet to find any other such highly compelling, yet under-hyped story mid-cap, consumption story in Indian stock market.
I thank Donald from my heart for finding this gem.
-Subash
Vivek - What is the source of this info?
year.
As usual a very informative thread, this looks like a fantastic opportunity for the future. I have been buying slowly into this for the past couple of days. My only concern rather query is theabysmallylow dividend yield and payout ratio. Hithesh/others do you have an idea if the management plans to change this in the future?
vidur,
Astral is under my watchlist but currently not too comfortable with valuations.
dividend yield is low bcos company has to keep on increasing capacities and hence due to ongoing capex, dividend payout is likely to be low even going forward.
Hitesh bhai,
To quote the first post of this thread by you only,
"One of the famous quotes of Buffet is âLeaving the question of price aside, the best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of returnâ
As can be seen from the capex done over the years by Astral along with the high rates of return, Astral Poly looks like a company worth looking into."
When a company is putting in more and more capital and still maintaining the RoE levels, should one be bothered that much about dividend yield ?
Valuations may be a concern no doubt, but dividend yield being low or prospect of higher capex coupled with lower dividends should not be adeterrent here. Not all businesses can be like PAGE and that’s why they are available at much lower multiples.
Thanks Hitesh for your reply, and Rudra I could not agree more, and it all shows that how strong it has been recently, while the whole market has capulated.
I have been looking for lower entry points and its just not been coming!
Having said all that dividend is important, because if nothing else in some cases it does give some cushion to prices, and helps in firms getting higher p/e ratios.
I think Astral does look like a very good story in the next 2-3 years and longer, and chasing a 5-10% lower entry point wont make much of a difference in the longer run. It is more important to catch the bus.
Agree with Rudra. I don’t think Astral’s business model is capital intensive. Its just that they are in a rapid growth phase and are conserving funds for growth.