Astral shares’ recovery from 52-week low is impressive but analysts are not upbeat; here’s why

Shares of Astral Ltd took less than three months to move from their 52-week low to 52-week high this year. The stock which hit a 52-week low of Rs 1,584 on June 20, 2022 touched a yearly high of Rs 2654 on September 9, 2022, translating into returns of 67.55% during the period. Astral Ltd is among the leading players in the Indian plastics product industry. The company has delivered a strong profit growth of 27.5% compounded annual growth rate (CAGR) over the last five years. It has reported a CAGR of 18% in terms of sales in the last five years.

However, the September quarter earnings of the firm were not so encouraging. Profit fell 50.14% to Rs 70.40 crore in the September quarter against profit of Rs 141 crore in the corresponding quarter of the previous fiscal. Sales rose marginally to Rs 1171.60 crore in Q2 against Rs 1154 crore in the September 2021 quarter. Company’s consolidated EBIDTA fell 28 per cent to Rs 157 crore as against Rs 219 crore in the corresponding quarter a year ago. 

The stock has fallen in line with its competitors in the last one year and in 2022. Astral Ltd stock has lost 17.48% in 2022 and fallen 14.135 in the last one year. Shares of its main competitor Supreme Industries have risen 4.12% in this year and gained 6.06% in a year. Finolex  Industries stock has lost 21.37% in this year and fallen 22% in a year.  Shares of another competitor, Prince Pipes are down 21.47% this year and declined 31.41% in a year.

In the current trading session, Astral Ltd shares rose 1.40% to Rs 1900.40 against the previous close of Rs 1,874 on BSE. Market cap of the firm rose to Rs 38,089.79 crore.

Total 0.12 lakh shares changed hands amounting to a turnover of Rs 2.26 crore on BSE.  After a healthy rally from 52-week low to 52-week high, the stock has corrected over 28% in 2.5 months.

Also Read: After 50-80% fall in 2021, 5 little-known stocks zoom up to 500% this year!

Here’s a look at what analysts said about the outlook and target price of the stock.

Manoj Dalmia, founder and director, Proficient equities Private Limited said, “Currently, Astral looks weak and might face some buying at current levels which can be in form of retracement. Investors can expect further selloff in the stock for any closing below Rs 1862, Rs 1692 on the downside can be the long-term target where one can accumulate. Heavy buying should be avoided at current levels.”

Ravi Singh, vice president and head of research, Share India said, “The stellar rise in the stock of Astral is fully reflected by the financial performance of the firm. Profit of the firm has constantly risen during the last five years. Factoring the uptick in real estate, rising market share, market consolidation and higher PVC prices have contributed to an increase in the company’s EBITDA.  In terms of technical setup, the stock of Astral is witnessing selling pressure on account of profit booking and the coverings may continue for some more period for the target of  Rs 1600 levels in near future.”

Abhijeet at Tips2trade said, “Subdued Q2FY23 results with a fall in margins as well combined with a negative sentiment seen in mid cap and large cap stocks due to lofty valuations has led to Astral stock price falling since the past few sessions. Currently, the stock is oversold. Investors should buy only if daily close is above Rs 1931 for a target of  Rs 2002-2046 in the near term. A daily close below  Rs 1866 could lead to a fall till  Rs 1817.”

Also Read: Why do many ‘DIY investors’ leave D-St within 2 years? Shyam Sekhar cites IPO lottery, 2 more reasons