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In the 'Analyst Concall: Astral hopes to maintain EBITDA margin at 15-16% in FY26' story that was published at 2037 IST Thursday, the one-line headline '--Astral: Aim to raise UK operations margin level to 10-15%' was incorrect. The company said it would bring back the UK margin to 5-10%. The one-line headline incorrectly said the company aims to raise this margin to 10-15%. A corrected version of the story follows:

Informist, Thursday, Jan. 30, 2025

By Gopika Balasubramanium and Narayana Krishna

MUMBAI – Astral Ltd. hopes to maintain its earnings before interest, tax, depreciation, and amortisation margin at 15-16% in 2025-26 (Apr-Mar), the company's management said in a post-earnings analysts' conference call. The company was able to deliver positive growth in EBITDA for the December quarter despite overall demand in the industry being weak, Astral had said in its earnings press release.  

Talking about volumes for plumbing products, Astral's management said that the industry expects the government to impose anti-dumping duties and this will likely help in improving volumes of the plumbing segment. The company said the improvement of volume in this segment is highly dependent on the government's spending.   

Speaking about its latest products, the company said it received UL certification for its fire sprinkler products and will now be able to export these to the US, Europe, and other markets. UL certification is a safety certificate issued by Underwriter Laboratories for industrial products without which the manufacturer cannot sell these products in the US. "I am happy to share that Astral is the first company in India to get U.S. certification for fire sprinkler products," Sandeep Engineer, chairman and managing & director of Astral Ltd., said.

The company said its overseas operations were undergoing a slowdown in FY25 and assured that it had taken some corrective measures in the US and the UK markets, including the launching of new products. " ...and lot of new products are getting launched in US market which is getting good response," Engineer said. "Already a few products have been heavy launched in this quarter which has got good response from the US market."

The company said it aims to improve its operating margin in the UK to 5-10% and has undertaken corrective measures including "few corrections in manpower costs which will be reflected in the coming quarters". The company said it is looking to improve its export business and is keen on entering other geographies such as the United Arab Emirates and Africa. The company said it has opened a new marketing office in Dubai to promote its products in West Asia.  

Astral said it would be focusing only on improving volumes of plumbing products here after and not on increasing EBITDA margins for this segment. The company is confident of achieving this once an anti-dumping duty is imposed on imports and also when there is a clear picture of the government's capital expenditure plans.  

Astral said it does not plan to sell any of its products at a discounted price to increase volumes. The company said once the products are sold at discounted prices it would take at least a year or six months to bring prices back to normal and this is a risk. Astral said it does not want to follow other companies in the consumer durable industry who are dependent on discounts to maintain healthy margins. The company said it is confident it will achieve the revenue guidance of INR 1.20 billion for its bathware products for FY25. It said that it has already achieved INR 830 million during the nine months to December and expects to cross the guided figure. 

The company said it would spend INR 2.50 billion as capital expenditure for FY26 and added its capital expenditure would be INR 4.5 billion for FY25. The company said it does not plan to add any new manufacturing facilities in the near term and that its new plant at Kanpur is ready to be operational. Astral said once the Kanpur unit is operational it will first add 30,000 metric tonnes of additional capacity for production of pipes in FY26. In FY27, it will add another 30,000 metric tonnes of capacity at this plant. The company also said that it has added 37,000 metric tonnes of pipe capacity during Apr-Dec and expects to add another 45,000 metric tonnes with the help of the Kanpur unit.

Astral reported a consolidated net profit of INR 1.14 billion on consolidated revenues of INR 13.97 billion. Thursday, shares of the company closed at INR 1,467.75 on the National Stock Exchange, down 0.5%.

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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