This multibagger stock has gained 135% in one year, should you buy?

Multibagger Stock: Shares of Astral Ltd have gained about 135% in one year and have been included in multibagger stocks. Brokerage house Edelweiss believes that the uptrend in this stock will continue for now. The brokerage said, “We believe that Astral continues to be the major beneficiary of the shift towards CPVC pipes given the firmness in the market and higher PVC prices. In addition, high growth in sectors such as sanitaryware, tanks, infra pipes and other product launches There is potential for growth.”

The company’s consistent market share gains and strong cash flows are driving down its premium valuation. According to Edelweiss, Astral maintained strong growth in the first half of FY22, its volume growth best among peers. Supreme Industries suffered a decline in volumes, followed by Finolex and Prince Pipes while Astral remained net cash positive.

‘The momentum will continue’
Edelweiss said, “Being growth-oriented, Astral continues to focus on launches (recently entering sanitaryware, tanks, etc.), capacity additions, branding and distribution additions (constant efforts). is also a major beneficiary of the consolidation, thereby providing a boost to the market. Share gains in Plastic Pipes & Fittings (visible in the current quarter).”

Given the strong demand, the management expects revenue of ₹10 billion in FY22, while margins are likely to improve from Q3FY22 itself as Astral has made substantial price increases to exceed input costs. In addition, seeing the growth opportunities, Astral launched two new products during the quarter: BONDTITE PRO and Resiwood WPC-FIX. Despite the uncertainty, the management is confident of seeing double-digit volume growth (observed in October). Edelweiss said they were also very positive on the opportunity in the infra pipe and plastic tank segment, and are planning to launch DWV pipes in December.

Disclaimer: (The information provided here is for informational purposes only. It is important to mention here that investing in the market is subject to market risks. Always consult an expert before investing money as an investor. Anyone from ABPLive.com Also investing money is never advised here.)

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