NSE-MANTRA

Astral Poly Technik-Play On The Transitional Shift

At CMP of Rs 180 the Astral Poly stock is trading at 8 times FY10E EPS and 5.9 times FY11 Estimated EPS of Rs 27. With increased capacities under its belt, the company is likely to grow at 30 per cent CAGR over the next 3 years.

Background

Astral Poly Technik is a major player in chlorinated poly vinyl chloride  (CPVC)  pipes and plumbing systems, with a licensing arrangement with Lubrizol of the US. It has entered into a JV with Speciality Process LLC of the US for manufacture of CPVC pipes and fittings for home, hospital, hotels and industrial applications.

Globally CPVC pipes are taking over from metal pipes, because of durability and corrosion resistant properties.

Expanding Capacities

Astral Poly has raised CPVC capacities to 26000 tpa in FY09 and will further raise the same to 35000 tpa by FY11.

Market Shift

Indian plumbing market is estimated to be worth Rs 25 to Rs 30 bn which is dominated by GI Pipes. On account of corrosion, heavy weight, high cost and low life span, market is shifting to GI Pipes.

New Products

The company has ventured into manufacture of SWR, Underground, Foamcore, ABS apart from increasing the range in its existing products of CPVC  and PVC pipes to Fire Sprinkler Systems.

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