Morgan Stanley has maintained an ‘Equal-weight’ rating on Astral Ltd, assigning a target price of ₹1,502, which implies an upside of 8.7% from the current market price of ₹1,382.00 (as of latest close).
The brokerage flagged a 5% revenue miss vs its estimates (MSe), primarily driven by the plumbing segment, where volumes grew just 1.3% against an expected 3%, and realizations declined 2% versus the expected 2% increase. This subdued pipes performance weighed on the overall topline.
The adhesive and paint segment revenues were in line with estimates. The India adhesive business grew strongly by 19%, while UK revenues remained flat. Paints revenue increased 7% YoY, but segment margins were weaker than expected, coming in at 9%, down 120bps vs MSe but still 50bps higher YoY.
Plumbing margins held steady at 16.3%, a 90bps YoY decline but in line with projections. However, volatility in PVC prices, which declined 18% YoY in FY25, led to inventory losses, with Morgan Stanley awaiting further clarity on the extent of the impact.
The firm remains cautious due to raw material price fluctuations but sees limited downside, maintaining its neutral stance.
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