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Investing.com - JPMorgan has initiated coverage on Astral Ltd (ASTRA:IN) with an Overweight rating and a price target of INR1,700.00.
The research firm highlighted Astral’s position as a long-term investment opportunity with clean exposure to real estate, low margin volatility, and specific margin improvement drivers.
JPMorgan noted that while Astral delivered gross profit growth of 16% from FY22-FY25 (the highest in the industry), significant expenses on channel development, sales team building for new business segments, and capacity expansion limited profitability growth to just 2% during this period.
The firm expects Astral’s profitability to grow faster than volumes as growth begins to accelerate across segments, and believes the company’s backward integration in compounding will help protect market share against increasing competition in CPVC pipes without compromising margins.
JPMorgan projects Astral will achieve a compound annual growth rate of 13% in revenue, 15% in EBITDA, and 17% in EPS from FY25 to FY28, with the price target based on a 55x multiple of FY28 earnings.
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