Astral (ASTL.NS) Takeaways from Investor Call Post Demerger Announcement

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Astral (ASTL.NS) Takeaways from Investor Call Post Demerger Announcement

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28 Jun 2026 17:40:52 ET │ 11 pages

Astral (ASTL.NS)

Takeaways from Investor Call Post Demerger Announcement

CITI’S TAKE

Astral’s promoters and management held a conference call to discuss the

Buy announced demerger of Plumbing and Adhesives+Paints businesses. Key

Catalyst Watch: Upside, expires 07-JUL-26 discussion points included the rationale for the demerger, growth outlook

Price (25 Jun 26 15:30) Rs1,486.90 for the adhesives+paints segment and continued promoter focus on both

the listed entities post the demerger. Below are the key takeaways: Target price Rs1,900.00

Expected share price return 27.8%

Rationale for the Demerger – According to Astral’s mgmt. both the plumbing and the Expected dividend yield 0.4%

adhesives+paints business have achieved sufficient scale to fund their own growth Expected total return 28.1%

going forward. Hence it made sense to demerge the two entities now, enabling Market Cap Rs399,433M

sharper mgmt. focus for both. While there would be some increase in overhead costs,

according to mgmt., the increase would not be substantial enough to outweigh the US$4,235M

benefits from the demerger.

Revenue/EBITDA split of the Adhesives+Paints Segment – The segment reported Tejas PradhanAC

revenues of Rs18.9bn and adj EBITDA of Rs2.1bn in FY26 (adjusting for one-time +91-22-6175-9861

branding spend in 4QFY26); adj EBITDA margin at 11.0%. Within this, the India tejas.pradhan@citi.com

adhesives business accounted for revenue of Rs12.7bn, adj EBITDA of 2.1bn (adj

EBITDA margin of ~16%); UK business accounted for revenue of Rs3.8bn, EBITDA of

0.15bn (EBITDA margin of ~4%) and the paints business accounted for revenue of

Rs2.4bn, EBITDA loss of 0.14bn (EBITDA margin of -6%).