Astral surges 9% as Q4 net profit jumps 38% on strong operational show

Shares of Astral climbed 9 percent in early trade on May 16, a day after the company posted a strong set of earnings for the fourth quarter.

Its net profit for the January-March period spiked around 38 percent on-year to Rs 199 crore, thanks to better operational performance. Easing raw material prices and use of low-cost inventories aided EBIDTA margin expansion by 492 basis points on-year to 20.5 percent in Q4.

The topline also increased 8 percent on-year to Rs 1,506 crore led by strong performance across its business segments.

“We believe strong volume growth in Astral’s plumbing division is attributable to pick up in construction activities, new product launches, expansion in new geographies and a favourable base of last year, which also aided its topline growth,” brokerage firm ICICIdirect stated in a report.

At 10.40am, the shares of Astral were trading with gains of 8.30 percent at Rs 1,728.15 on the National Stock Exchange.

About 34 lakh shares changed hands on the exchanges, as against the one-month daily traded average of four lakh shares.

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Going forward, the brokerage firm also expects  the company to continue to report volume-led revenue growth supported by new product launches and capacity additions in new geographies.

The EBITDA margin is likely to normalise in the coming quarters on the back of reducing impact of inventory gains, the broking firm highlighted.

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