Astral (ASTRAL) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 faced significant challenges due to a 13.5% drop in PVC prices, leading to dealer destocking and subdued demand, especially in construction and agriculture sectors.

• Despite market headwinds, margins were maintained at 16%-18% in pipes and 15% in adhesives, with no loss of market share.

• Expansion projects progressed: Hyderabad and Ghiloth plants ramped up, OPVC product line launched, and new PTMT and valve SKUs set for Q4 launch.

• Bathware division grew 63% YoY in Q2, adhesives India business grew 8.7% in Q2 and 11.5% in H1, while UK adhesives remained flat with margin pressure.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, were approved and released, with a limited review by statutory auditors confirming no material misstatements.

Financial highlights

• Consolidated Q2 revenue was INR 13,704 million, up 0.5% YoY; EBITDA at INR 219 crore, down 6% YoY; net profit at INR 1,087 million.

• Standalone revenue from operations for Q2 FY25 was Rs 12,301 million, with net profit at Rs 1,223 million.

• Pipe and bathware EBITDA margin held at 18.3%; adhesives India at 15.5%; paint business margin at 5.35%.

• Inventory loss of INR 10-15 crore due to price volatility, but margins remained within guided range.

• Paint business revenue grew 5% YoY to INR 49 crore, but EBITDA dropped to INR 2.6 crore.

Outlook and guidance

• FY25 volume growth guidance for plumbing is 10%-15%, depending on destocking trends and BIS implementation.

• Margins expected to remain at 16%-18% for pipes and 15% for adhesives India; consolidated margin guided at 15%-16%.

• Paints and bathware expected to see higher growth in coming quarters as new geographies and products scale.

• UK adhesives expected to return to double-digit growth and normalized margins from Q4.