UBS initiates Astral stock with Buy rating on strong growth outlook

Published 09/09/2025, 14:04
UBS initiates Astral stock with Buy rating on strong growth outlook

Investing.com - UBS initiated coverage on Astral Ltd (ASTRA:IN) with a Buy rating and a price target of INR1,800.00, citing the company’s strong position in India’s plastic pipes industry.

The research firm highlighted Astral’s consistent execution track record, product innovation capabilities, wide geographical reach, and industry-leading margins as key factors supporting its positive outlook.

UBS expects Astral to achieve an 11% volume compound annual growth rate from FY25 to FY28, outperforming the broader industry by approximately 200 basis points, while regulatory tailwinds could boost PVC prices and drive margin expansion.

The firm noted that backward integration of CPVC resin could add 300-400 basis points to pipes EBITDA margin in the midterm, while completion of major capital expenditures should lead to strong free cash flow generation and earnings acceleration.

UBS believes the current valuation, which sits below Astral’s five-year average, does not fully account for a potential sectoral upcycle and earnings growth momentum expected from the second half of FY26.

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