The management said the recovery in pipe segments has picked up momentum from September 2020 onwards. The adhesives business is also doing better from July 2020 and further picked up from October 2020, it said.
The company has plans for expansion and has acquired adjacent land at most of their plants for expansion purposes. To have a pan India presence they acquired a land in East India. In FY21, they will not be heavily spending on branding activities. Analysts at Dolat Capital believe that these are investment phases and Astra will reap long term benefits of these strategies for prolonged periods atleast for the next 5 years.
“With new product addition in the Adhesive segment as well as pipe segment, we feel that revenue growth along with margin profile should get better once the economy is fully recovered. However, with high growth trajectory and expansion activities in place, valuations will remains expensive,” the brokerage firm said in result update.
“We believe Astral has reported a healthy performance during Q2FY21 with improved margin. The product being largely urban centric and linked to construction activities, the company has witnessed postponement of demand led by pandemic and regional lockdowns. The demand pickup started from September 2020 onwards. We believe pick up in constriction activities would help further pick-up in sales for both the segment from H2FY21E onwards,” ICICI Securities said in a note.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.