Multibagger Stock: Astral Shares is one of the multibagger stocks that the Indian stock market has given in the recent years. This stock has given 275 per cent return to its shareholders in the last five years. It has delivered stellar returns in the post-Covid stock market rebound as it surges from all around since 630 1925 per share level in the last three years, giving returns of over 200 per cent during this time. However, this multibagger stock has been trading sideways since last one year. But, there has been some rally in Astral shares in the last one week which has caught the attention of market experts. According to Axis Securities, Astral shares may rally 10 per cent this week and the brokerage has given ‘Buy’ tag to the stock in its weekly stock pick for this week.
On the outlook and valuation of this multibagger stock, Axis Securities report said, “Strong volume growth across industry players reflects strong construction activities in Q3FY23. For the capex phase astral is almost at peak and is well positioned to meet the upcoming demand as the current capacity utilization is 57 per cent.”
“In the last 4 years, ASTRAL has registered a volume growth of 10% CAGR, which includes Prince (4 years CAGR of 2%), Supreme (4 years CAGR -10%) and Finolex Pipes (4 highest among industry players. Year on year CAGR at -12%. This shows that ASTRAL has strong brand equity in the market and is gaining market share in the industry. In the plumbing segment, Astral is able to outperform its peers due to its strong brand has been steadily gaining market share compared to 2016. Equity, superior products and deep relationships with plumbers,” the brokerage said.
Axis Securities report further stated that after a sharp correction, PVC prices corrected on Dec 22, forming a channel restocking. Besides, cheaper PVC rates improved the demand scenario in housing and infrastructure in H2FY23E. Strong industry volume growth in Q3 FY2023 reflects robust construction activity in the country. The company is targeting 500 displays for faucets and sanitary ware which will add revenue in FY24E.
On positional investors’ recommendation on this multibagger stock, Axis Securities said, “We recommend a target price with a buy rating on the stock. 2,115/share, which means an increase of 10% over CMP.”
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to check with certified experts before taking any Investment Decision.
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