any idea about y the citibank and westbridge has sell the shares???
IDFC to enter?
Astral Poly Technik Ltd has informed BSE regarding a Press Release dated November 21, 2014, titled “Astral Poly Technik Ltd. Acquires 76% Stake in Resinova Chemie Ltd”.
http://www.bseindia.com/corporates/ann.aspx?scrip=532830&dur=A&expandable=0
Attaching a presentation by the company relating to its Acquisitions of the UK Based Sealit and Kanpur Based Resinova in the fast growing adhesive business
For those who have missed this stock, adding a tech analysis pic for suitable level to enter this stock. This market correction is a good opportunity to catch this stock.
For those who do staggered buying. The price points are -
- 380
- 365
- 350
I initiated a small position in Astral at 355 after reading on VP about the business quality, management, future prospects etc and seeing the stock had corrected 20% from it’s highs. This week, I was just reviewing my portfolio and doing valuation calculations for all my stocks. For Astral, these were my figures:-
Book Value Per Share - Rs. 28.05
Intrinsic Value per Share - Rs. 61.68 (my assumptions are fairly conservative but this is still no where near the CMP)
{Assuming FCF - 20 crores (in the last 8 years Astral has not produced FCF more than 15 crores owing to it’s high capital expenditures), Growth Rate - 15% for 10 years, Discount Rate - 12%, Long term growth rate - 10%}
Enterprise Value - 4099.54 crores , EBIT FY’14 - 135 cr
Enterprise Value / EBIT - 30.37 (Read online that Buffet generally pays for good businesses at EV/EBIT valuation multiples of ~8 )
P/E - more than 50
Almost every market guru keeps on repeating that no matter how good a business might be, there is no point owning a great business at great prices (read as overvalued)
Hoping that you guys can come up with some answers on it’s current valuations. (Obviously for people having entered at 300-400 levels before the split, it might be worth the risk holding on given how the market has been pricing this stock)
PS: I can’t see any reason not to sell it the moment it goes anywhere near its highs (i.e. 430-440, still making 20% profit)
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Astral Poly Technik standalone quarterly net plummets 47.85% -
See more at:
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Key highlights by Capital Mkt;
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Thanks Hemant V Bhatia for this summary
Towards the end, the management also indicated that they would be able to achieve a consolidated topline of Rs. 1650-1700 crores, which is handsome 45% plus growth rate. I hope I heard that bit right.
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Was just going through the projected numbers by brokerages -
Consolidated profit for fy2015, fy 2016 and fy 2017 seems like 86 cr, 120 cr, 160 cr.
people out here with deeper information have different opinion ?
Not so great result from Astral Poly,
http://www.bseindia.com/corporates/anndet_new.aspx?newsid=70338aef-6c08-4fa1-96fd-426e0c89e7bd
Anyone has a view? Significant jump in the other overhead being the main contributor to decline in profit YOY.
Closure of Baddi Unit | 18/06/15 16:23
Astral Poly Technik Ltd has informed BSE that the Company has closed down its operations at manufacturing unit at Baddi, Himachal Pradesh because it has become commercially unviable to run the plant.
I assume it is due to the lapse of the Tax Benefits.
Various benefits at Himachal Pradesh Plant
The company’s HP plant where it manufactures fittings, enjoys lower tax rate for 10 years (30% concession ie Astral pays 3-4% tax only), excise holidays for 10 years, CST of just 1% instead of 2% for 10 years and around 25% cheaper power cost. The company has enjoyed all these benefits for 5 years already and will continue to receive the same for next 5 years until FY15.
Source: http://breport.myiris.com/ASBL/ASTPOLTE_20101103.pdf
The balance capacity of ~7,500 MT is at Baddi, which manufactures fittings largely.
(As of 2012)
Source: http://www.hdfcsec.com/Research/ResearchDetails.aspx?report_id=2985972
Disc: I will remain invested.
Will add on expected further dips, besides the valuations were beyond reasonable.
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Astral is going to have multiple triggers over next few years. It has established itself very well through branding and Ad campaigns. Reality market is still in struggling phase as supply demand equation still do not seem to agree with each other. Long term story still intact and triggers will keep coming untill 2018 till the reality market revives as we witnessedthe growth in 2000-2006 era.
There are two conflicting trends at play and I would appreciate opinions on the same which would impact all companies like Astral/Kajaria/Cera/Supreme/Greenply etc.
a) The government is focussing very strongly on clamping down on black money. This, in conjunction with high inventory levels across the country creates a big question mark on the real estate construction and performance of the companies mentioned above since atleast 50% is institutional driven.
b) On the flipside is the housing for all proposal which can imply a big upside for these players.
The question is which one trumps the other. Could there be some serious near term pressure on growth for these companies ? Ofcourse- this will impact real estate developers as well…
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Deleted - as per mod request
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I recently was doing some scuttlebutt and speaking to some industry insiders in the plywood sector. The view is that real estate is in very bad shape in West & North of India and moderate / stagnant demand in East & South. It is definitely impacting the offtake of products. Housing for all and smart cities have not yet picked up demand on the ground.
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Sumir Chadha of WestBridge Capital summarises the business and rationale for investment in Astral. They had invested in Astral in March 2012 when market cap was sub 500 crore and today it is more than 5000 crore (they have partially exited this year)
Astral – impenetrable moat:
One of the things we loved about Astral was that when we spoke to plumbers in India – our team went and spoke to 1,000 plumbers across the country -they said they loved Astral. Because over a decade Astral has gone out and reached out to them, built the brand and these are the decision makers. So, when we get the pipes replaced in our house, none of us know which pipe is going inside our house, except for the plumber. So, Astral built this very powerful brand in India. That is why they were able to grow 40% a year for eight years in a row. They could scale the business beautifully. It is very hard for a competitor to come tomorrow and change all these plumbers minds. Because over many years they have built a lot of comfort with the brand, it is reliable and very high quality. If a company has a long term competitive advantage like that, it can win in the market place and make money for our investors.
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“In a parallel development, it made an allotment of 1.38 million equity shares on preferential basis to Parikh, who had founded Kanpur-based Resinova Chemie in 1995, at a share price of Rs 425.93 apiece, aggregating Rs 59 crore (approximately $9 million)”
Read more at:
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Yet another quarter of very impressive top line growth but bottom line degrowth
I have been observing the results of a lot of companies. One common thing I observed is that, very poor top line growth. but very good bottom line growth. ( operating leverage, cost cutting whatever you call it). But astral is just the opposite.
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Lubrizol Completes CPVC Expansion Plans with Opening of Compounding Plant in Dahej, India http://www.euroinvestor.com/news/2016/01/28/lubrizol-completes-cpvc-expansion-plans-with-opening-of-compounding-plant-in-dahej-india/13298863
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How does this impact Astral? I assume this will help in avoiding forex losses as raw material from Lubrizol would now be available locally?