Astral polytechnik ltd


(Vivek Gautam) #321

Agree that let the company do the talking is the best strategy. However scuttlebutt is quite useful at times IMHO

In Astral case scuttlebutt regarding Blazemaster n BIS approval did help me to load around 350 Rs giving a handsome return till now.

Here again scuttlebutt is not confined to a single dealer but he may be the one who becomes frank enough to come out with nos. I was referring to one of the distributor n not dealer in Delhi but almost all distributors contacted gave very positive response on future prospects. Moreover their competitors Ahirwad dealers were also positive abt Astral n CPVc mkt in general.

Regarding Canfin the nos were good on the indicated lines but the guy seemed to be over optimistic . Still it’s perplexing why the co is not performing .

Scuttlebutt is real useful n let all valuepickr members do contribute in it . This activity needs to be encouraged a lot.


(Hitesh Patel) #322

There is no denying usefulness of scuttlebutt. But we should clearly understand what scuttlebutt is. Talking to “someone close to management” or an isolated distributor etc and then trying to project figures of sales and profits is fraught with danger.

If u want to see how scuttlebutt is done properly pl refer to the kaveri thread and see how much effort donald and team hyderabad have made in mapping various areas and putting up data so that everyone can make an educated guess about the possible numbers.

One has to learn from one’s own and vicarious experiences – thats what munger stresses. Our own experience in case of canfin should teach us that figures given out by people could be way off the mark and we should not rely on these solely for investment decisions.


(vinay ambekar) #323

This is regarding discussion in another thread about impact of rupee depreciation on Astral. Did some back of the envelope calculations on the impact of rupee depreciation on profits, and request validation. RM cost as % of sales is between 65-70% historically. Lets us assume 70%. As per FY12 balance sheet, imported RM cost was 47% in 2011 and 52% in 2012 of total RM Cost. Let us assume the same at 50% in 2014. Therefore imported RM cost is 35% of sales. So Re depreciation of 9% (54 in FY13 vs assumed 59 in FY14) will reduce net margin by 3.15% (35% * 9%) before tax and by 2.2% after Tax (assuming 30% tax). Company manages around 7% net margins, which will reduce to 4.8% due to Re depreciation. Some of this can be passed on, but considering weak economic environment and slowdown in real estate, Astral’s ability to pass on cost increases would be hampered to some extent. Are we looking at PAT degrowth in FY14? Assuming 30% increase in sales in FY14 to 1066 cr, PAT at 5% is 53.3 cr and EPS is about 24 as compared to 27 in FY13. Posted by Raj Panda at Saturday 20:01 Hi Hitesh, I have a doubt, would most of these companies like Astral, Polymed be showing hedging loss in the next quarter, given the rupee movement ? I think they would have hedged in the range of 54-56/-, and this movement to 60 should call for showing hedging losses. Posted by Hitesh Patel at Saturday 19:17 subhajit, regarding accelya, I have no idea about it except that there is a huge dividend protection due to high payout. about astral getting hit by rupee depreciation, I think they should be able to pass on the costs to customers. Earlier problem was of hedging and company getting hit with forex losses and that seems to have ended now.


(Vivek Gautam) #324

A superb video recently aired on CNBC Making it Big series on Astral Poly MD Sandeep Engineer journey so far.The guy is down to earth but with FIB & has already seen the vicissitudes of life.

Seems the capital of valuepickers is in very safe hands & destined to grow at a healthy pace. Please do give your comments on the video.

http://www.youtube.com/watch?v=kJ_3DNwDBNI


(Vinod MS) #325

Hi,

Spoke to a hardware shop retailer in Bangalore today. He sells Ashirwad CPVC and Supreme PVC pipes.

Told all companies have increased their prices. 3% earlier this year and now 5%. He told the reason for price increase is dollar rate :slight_smile:

Astral is priced lower than Ashirwad. Astral sales team meets him, but customers ask for Ashirwad only (in CPVC).

CPVC has bright future and he sees all players growing. Is not sure if the Hosur plant will help Astral in Bangalore as they are already priced lower, but brand pull is for Ashirwad.

Cheers

Vinod


(Shankarnarayan K) #326

I spoke to a guy who sells Astral and Ashirwad and it seems Astral is 5% cheaper and is also of better quality than Ashirwad. My be retailers who sell both could give a clearer, unbiased picture :).

:))


(Raj Panda) #327

Hi Vinod & Shankar,

Thanks for the good input.

I have always been curious about how PVC Vs CPVC pipes stacks up against each other. Both price and buyer perception wise.

You got any insights on that from your talk ?

Regards


(Vinod MS) #328

Hi Raj,

CPVC is up against GI pipes and not PVC. CPVC has some 40% penetration in US compared to 5% or so in India. CPVC is better than GI on all counts and should grow substantially going forward. You will get enough info in this thread itself.

Astral has a PVC segment also and that is also doing well.

Cheers

Vinod


(bala) #329

one thing i read somewhere is due to exclellent relationship with lubrizol, the currency fluctuations are not fully passed onto one end, they ensure none of them bleed too much, so when rupee weakens, lubrizol will absorb some loss, when rupee strengthens astral will absorb some loss. so when rupee dropped from 54 to 60 in couple of months, lubrizol will be ready to sell at somewhere 57 instead of 60. if astral cant sell all they produced due to price hike then astral will buy less from lubrizol. so this arrangement is a win-win situation for both.

one more thing, they used to have short term hedging policy covering next 2 months, but recently they told they will change the duration to longer term, dont know if they have implemented this


(Nikhil Moryani) #330

Hello All,

Thanks to all the forum members for collective effort put in to collect data points and reflecting on the same.

Any update on the pick up of Blazemaster and Solvent Cement?

What’s the scene with Bendable?

Could a decent off-take of new products lead to expansion in p/e?


(Ankit Gupta) #331

Hi,

I am attending Astral’s AGM tomorrow. Is anyone else attending it?

Regards,

Ankit Gupta


(Nikhil Moryani) #332

Ankit Bhai,I,m sure you have a list of questions but for the good of boarders please get an update on a few points like;

1). State of competition in the industry as of now.

2). Response to new products in the market,especially Blazemaster.

3). Demand scenario in the Real Estate industry and overall.

And,may be some clarity on the hedging policy the company follows.

Thanks and looking forward to your inputs.


(Deepak Swamy) #333

Q1/Fy 13-14 Results out…

Total Income up 41.5% to 215.99 Cr from 152.66 Cr.
EBIDTA up 9.7% to 21.74 Cr from 19.82 Cr.
Net Profit up 24.5% to 11.89 Cr from 9.55 Cr.

EBIDTA margin is 10.1% v/s 18.5% (MQ-13) and 13% (JQ-12)
NET Profit margin is 5.5% v/s 11.2% (MQ-13) and 6.3% (JQ-12)

Total Raw material costs as a %ge to Income is 74.1% v/s 68.5% (MQ-13) and 68.2% (JQ-12)
Employee costs to Income is 2.6% v/s 2.2% (MQ-13) and 3.1% (JQ-12)
Other expenses to Income is 13.3% v/s 10.8% (MQ-13) and 15.7% (JQ-12)

Financial costs to EBIT is 10.5% v/s 3.7% (MQ-13) and 13.6% (JQ-12)
Tax Rate 25.5% v/s 25.6% (MQ-13) and 20% (JQ-12)

Total Raw material costs which is up 54% affected EBIDTA
Decrease in financial costs and forex gain v/s loss helped Net profits.

EPS 5.29 v/s 4.25
Recorded TTM (sum of 4 quartr) diluted EPS: Rs. 27.53

On 05/08/2013, stock on BSE Closed flat at Rs. 547.50/-
(Results came in after market hours)


(Raj Panda) #334

Drawing attention to the 3rd point in notes to the account:

)- In view of the prevailing volatility in the foreign exchange market, in respect of foreign currency borrowing and corresponding forward contracts, loss arising on foreign exchange rate fluctuation on outstanding balances, as at the end of the quarter has not been given effect in the above results as the company will account for the same at the end of the year. Such loss for the quarter is Rs. 1585.20 lacs (loss of 1253.33 lacs in the quarter in the previous year).

Seeking expert comments on this.


(Ashwini Damani) #335

As pointed out by Raj, the non adjustment of Forex Loss results in overstatement of profits. The company would have had a loss of 4 cr otherwise. This is not good accounting. Moreoever since the rupee level of 61 here is to stay, I am not sure why the management is postponing the correct treatment.

Though I feel, its a one time loss, and the mgmt should be able to pass on costs due to exchange rate fluctuation on imported items to customers.


(Nikhil Moryani) #336

Raj ji,its a standard practice by the company to not reflect fluctuations on a quarterly basis and do it at the year end. Nevertheless,the figure of 1585.20 lacs for current quarter is worrisome.

As a long-term investor,one should not pay much attention to FOREX fluctuations as these will average out on the long run. What one needs to look at is the growth,in my opinion. But,one could counter argue that growth should be profitable and I want to know how other investors feel about it.

Need guidance of experts on the forum.


(Vivek Gautam) #337

Company Press release from Business Wire India
Source: Astral Polytechnik Limited
Monday, August 05, 2013 06:45 PM IST (01:15 PM GMT)
Editors: General: Economy, People; Business: Banking & financial services, Business services, Chemicals, Financial Analyst, Stock exchanges
âââââââââââââââââ
Astral Poly Technik Delivers Robust Topline and PBT Growth of 41% and 34% Respectively in Q-1

Ahmedabad, Gujarat, India, Monday, August 05, 2013 â (Business Wire India) â Astral Poly Technik Ltd., leaders in manufacturing ofCPVC pipes & fittingsannounced the financial results for the Quarter ended on 30th June, 2013.

Overview of Q1 FY 2013-14 v/s Q1 FY 2012-13

â Companyâs sales from operations increased by41%toRs. 2,158.9 Mnfor the FY 2013-14 (Q-1) as againstRs. 1,526.1 Mnin FY 2012-13 (Q-1)

â Profit Before Tax**(PBT)has increased by34%toRs. 159.5 Mnfor FY 2013-14 (Q-1) as againstRs. 119.3 Mn**in FY 2012-13 (Q-1)

â Cash Profit has increased by21%toRs. 167.5 Mnfor FY 2013-14 (Q-1) as againstRs. 138.4 Mnin FY 2012-13 (Q-1)

â Profit After Tax**(PAT)has increased by25%toRs. 118.9 Mnfor FY 2013-14(Q-1)as againstRs. 95.5 Mn**in FY 2012-13 (Q-1)

â The Company has delivered an Earning per Share**(EPS)ofRs. 5.29**for the current quarter (On Rs.5 Paid up Shares).

As usual, this quarter also company is able to maintain 40% plus growth in topline and similarly company was able to proportionately increase the PBT by 34%.

During the quarter Q-1 the unrealized loss on account of foreign currency borrowings is Rs. 158.52 Mn as against the last year Q-1 loss was Rs. 123.53 Mn.

During the quarter under review Q-1 company was able to utilize its capacity to the tune of13,122 M.T.as against the last year Q-110,789 M.T.

The Upcoming Hosur plant of Company is at the advance stage of Completion. Company is planning to Commence Commercial Production in Q-3.

During the Quarter, the Company has increased its stake in Kenya JV from 31.90% to 37.50%.

On 2nd August 2013 our managing director Mr. Sandeep Engineer receivedâAMA-Atlas Dyechem Outstanding Entrepreneur (2012)âAward from Dr. C. Rangarajan, Chairmen, Economic Advisory Council to the Prime Minister at the function organized at Ahmedabad Management Association, Ahmedabad.


(Amit) #338

phenomenal results by astral. to grow topline by 41% in such an environment when GDP is barely above 5, is in my opinion, outstanding. However, I hope the market pays a lot of attention to the forex loss, as it has done in the past, and the stock tanks, so that I can load up more:)


(JatinK) #339

Last year profits were 60 crs. Now with 15.8 crs exchange loss in Q1 & more to come in Q2 (Rs has fallen in Q2 also), I think it should be difficult to have a bottom line growth this year.

With 20 PE its not cheap & its possible that the stock may correct. Though its also possible that market will say the top line growth is good & forex loss is one-off, so lets take this higher.

However, I feel other stocks like Ajanta, Cera, Canfin, Repco, PI, Kaveri at CMP offer better return-risk ratio than Astral at current price.

Requesting seniors to share their views.

)- Jatin


(Vivek Gautam) #340

The stock is a simple buy n hold on every fall due to

  1. Co has pricing power so whatever hit it takes in this qtr will be more than compensated by March 14 by price increase

  2. Big Size of Opportunity

3)Ethical Promoter with high integrity

4)Good ROCE