Astral Poly Technik: Recommendation Review

We had recommended Astral Poly Technik (ATPL) in DSIJ Vol. 26, Issue No. 25 (dated November 21-December 4, 2011) and reviewed our recommendation in DSIJ Vol. 27, Issue No. 6 (dated February 27-March 11, 2012). The stock is currently trading at Rs 206, which is at a premium of 17.75 per cent to our recommended price of Rs 175.

Despite the financial pressures faced by ATPL, as evident from the results for the quarter ended December 2011, we had advised our readers to stay invested in the counter as we remained bullish on the company’s fundamental prowess and operational ability. For the quarter ended December 2011, it posted a topline of Rs 160.98 crore and a bottomline of Rs 4.74 crore as against Rs 98.64 crore and Rs 13.02 crore for the quarter ended December 2010. This was mainly on account of the extraordinary losses of Rs 5.80 crore. Otherwise, the performance of the company would have been better.

At the current levels, while we continue to maintain our bullish stance on the counter owing to the strong demand in plumbing systems from the replacement market as well as new markets coupled with ATPL’s ongoing capex plans to increase its product offerings, we advise investors to book partial profits. Though there is enough steam left in the counter to keep creating wealth for investors, booking partial profits now looks like a wise move. The March 2012 quarter results will be announced soon, and investors can hold the rest until then.