Astral Poly Technik Ltd Research Report By IDBI Capital

Astral Poly Technik Ltd. (Astral) beats our expectations on earning front while EBITDA margin was inline with our estimate. In Q4FY16, Consolidated revenue/EBITDA grew by 13%/19.5% YoY to Rs5,323 mn and Rs651 mn, respectively (below our estimates) while adjusted PAT (adjusting employee settlement of Rs68 mn) came at Rs492 mn, up by 88.9% YoY due to higher other income and lower tax rate. EBITDA/Adjusted PAT margin improved 60/370bps YoY. For FY16, Consolidate revenue/EBITDA/Adjusted PAT grew by 20%/21.9%/34.4%, respectively.

Though we tweaked down our revenue/EBITDA estimate moderately for FY17/FY18, we maintain our earnings estimate for FY18, due to the emerging benefit of margin improvement (local RM sourcing + uptick in PVC prices), reduction in working capital (benefit of SAP implementation) and tax benefit. We expect revenue/earning CAGR of 23%/34% in FY16-18E. The stock currently trades at a P/E of 34.9/25.6 its FY17E/FY18E earnings. Maintain BUY (TP unchanged to Rs520).