HIGH LIGHTS FROM CONCALL
Company is chugging along nicely .
1)Topline increases from 200 Cr to 255 Cr & bottomline 10 Cr to 16 Cr.
2)Inspite of recent price hike CPVC is still cheaper by 15-20% vs GI pipes.
3)New generation of plumbers dont know how to work with old GI pipes
4)Co is not facing demand problem inspite of price hike thnaks to combined demand of new projects,repairing & refurbishment of old aptt & houses.
5)Inspite of lot many new players jumping into CPVC segment Astral is not facing any problem exemplified by their pricing power,branding activity & moreover Lubrizol is so proven it stands apart by way of performance.
No body likes to take a chance when hot water line running at very high pressure.
- Co is aggressively adding land banks in all locations of the existing plant of Astral including Dholka, Baddi.Hosur they have incurred capex of 50 odd crore and the complex already has substantial land with them.The long term liabilites has jumped 50% because of that but the company is well placed to
take care of big demand from all corners of India.Co is expecting capex of 50 Crores in next year as well.
Company passes on full cost to its customer of all rupee depreciation & PVC price increases so as to maintain its EBIDTA margins of 12-14%.
Hosur plant commissioning expected in 10-15 days will be a major trigger for the co as freight costs as high as 6-7 % on a comparatively lower product price makes them uncompetitive.
This will open up low tapped south Indian market for PVC ,drainage,SWR, Column pipes besides CPVC.
Column or borewell pipes is another big 2000 Crore opportunity they want to tap aggressively as so far they have been generating only 40-50 Cr from it.
Bendable exports is another big opportunity still not tapped as co is facing some teething problem in Lubrizol machine commissioning though the exports to Mexico has started.
Blazemaster is still exclusively with Astral & BIS has taken samples for testing n has raised some queries as well. Separate approvals from diff state govt would also have to be taken for it.Its a 1000 crore worth of opportunity.
12)Tax benefits from Baddi plants will still continue for next 2-3 years & tax will remain in range of 25-26%
13)Adhesive cement manfg which was being carried out from a rented premises so far to test & gauge the response & after seeing good response will be moved to its own premises.Co expects 50 Cr worth of business from it in next 1-2 year.
CPVC generates 60% & PVC 40 % of business for the co & its having good demand for both segments.
Co is very confident of not only meeting its 20% growth guidance but exceed it too.Debtors days are being reduced .Once Hosur plant is commissioned debt will further come down & operating leverage will come into play.