Astral shares rally 10% following Q1 results; Citi sees target price at Rs 1,900, Nuvama upgrades stock to 'Buy'

Synopsis

Astral shares surged nearly 10% after strong Q1 FY27 results, with profit rising 51.8% YoY. Citi retained a Buy rating with a Rs 1,900 target, while UBS maintained Accumulate. Nuvama upgraded the stock to Buy, citing strong pipe volumes and margin prospects, while Motilal Oswal retained Buy and CLSA maintained Hold.

Shares of building materials and piping major Astral surged as much as 9.5% to an intraday high of Rs 1,599 apiece on the BSE on Thursday after the company reported strong Q1 FY27 results.

Astral posted a consolidated net profit of Rs 120.2 crore for the first quarter of FY27, up 51.8% from Rs 79.2 crore in the year-ago period.

Astral attributed the growth in profitability to higher utilisation at its new manufacturing plants, a shift towards higher-margin products and strong operational execution despite broader industry headwinds.

EBITDA for the quarter rose 25.8% year-on-year to Rs 244 crore, with EBITDA margins expanding by 120 basis points to 15.5%. While raw material price fluctuations caused the broader piping industry to contract by around 10%, Astral managed flat volume growth, continuing to capture market share.

What are brokerages saying?

Citi has maintained a Buy rating on Astral with a target price of Rs 1,900. The brokerage noted that Q1 performance demonstrated clear resilience, with plumbing margins expanding despite input cost fluctuations. Citi highlighted that channel restocking and strong demand recovery in July resulted in double-digit volume growth heading into Q2, while the CPVC resin integration project remains on track for Q4 FY27 completion.

UBS has an Accumulate recommendation with a target price of Rs 1,950. UBS emphasized that Astral continues to outperform peers and gain market share despite broader industry softness. The brokerage believes Astral’s decentralized manufacturing model and favorable raw material dynamics will support volume recovery and margin gains going forward.

Nuvama upgraded Astral to a Buy rating (from Hold) with a revised target price of Rs 1,675. The brokerage noted that pipe volumes were the best in the industry for Q1, while EBITDA per tonne beat market estimates. Nuvama expects double-digit piping volume growth with 16–18% operating margins for FY27E as demand momentum picks up in Q2.

Motilal Oswal maintained a Buy rating with a target price of Rs 1,697. Despite operational numbers slightly lagging elevated expectations in adhesives, the brokerage believes Astral's core business remains best-in-class. Motilal Oswal expects Astral to benefit from a volume surge following price stabilization, backed by management's projection of double-digit volume growth and 20%+ value growth in FY27.

CLSA retained a Hold rating with a target price of Rs 1,490. While acknowledging that Astral continues to gain share in a challenging environment, CLSA believes the current valuation adequately reflects the near-term volume recovery, preferring to wait for sustained margin expansion in the Paints and Adhesives segment before re-rating the stock.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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