Q1 Results: Astral Disappoints in Profits, Shares Dip 8%

Astral Ltd, the mid cap company dealing in pipes, adhesives, and associated products manufacturer, has announced its financial performance for the quarter ended June 30, 2025. The performance of the company was considerably down across all major parameters, with reasons primarily being tough market conditions and fluctuating polymer prices.

Major Financial Highlights

• Net Profit Decreases 33%: Astral posted a net profit of ₹79.20 crore for Q1 FY2025, a sharp decrease of 33.72% YoY, compared to ₹120 crore in the year-ago period. This disappointing bottom line came in below market estimates and reflected pressure on profitability.
• Revenue Slightly Lower: Operational revenue declined 1.6% year-over-year to ₹1,361.2 crore from ₹1,383.6 crore in Q1 FY2024. The slight revenue fall was insufficient to counterbalance the effect of increasing costs and negative pricing dynamics.
• EBITDA, Margins Under Pressure: Operating profit (EBITDA) fell 13.8% to ₹185 crore (from ₹214.4 crore YoY). EBITDA margin reduced sharply to 13.6%, as against 15.5% a year ago—a decline of 195 basis points. This margin reduction was witnessed in core Plumbing as well as Paints & Adhesives segments, which declined by 150 and 280 basis points, respectively.

Factors Affecting Performance

Astral attributed the soft performance to increased volatility in PVC prices mainly. Average PVC prices were around 14% YoY lower in the quarter, with a further sequential decrease of 4-5% over Q4 FY2025. The price fluctuations resulted in significant inventory losses and squeezed realisations, especially impacting the pipes business. However, the management stated that PVC prices stabilised in July, which may support a recovery in demand in subsequent quarters.

Segment & Expansion Updates

While overall performance was subdued, certain business segments were resilient:

• Bath-ware division: Sales increased 27.4% YoY to ₹333 million.
• Adhesives India: Recorded 9.2% growth with a 14% EBITDA margin.
• Paints segment: Growth of 20.7%, though margins continue to be thin at 1.4%.

Astral also increased its plumbing manufacturing capacity and acquired Al-Aziz Plastics Private Limited, expanding its range of fittings and accessories. It entered into an agreement to acquire an 80% share in NEXELON Chem Private Limited to produce CPVC resin with production set to begin in Q2 FY2027.

Market Response & Outlook

Astral shares responded negatively, declining over 8% after the results and closing at ₹1269.30 on August 12, 2025. The stock has decreased 32% YTD. Astral's management remains optimistic that there will be calmer PVC markets and better demand in future quarters once conditions level out.

All in all, Astral's Q1 FY2025 performance underscores the vulnerability of the industry to commodity prices and reinforces the imperative of strategic diversification as the company weathers persistent market headwinds.