Astral (ASTL.NS): Demerger of the Adhesives and Plumbing Businesses

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Astral (ASTL.NS): Demerger of the Adhesives and Plumbing Businesses

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26 Jun 2026 06:16:32 ET │ 12 pages

Astral (ASTL.NS)

Demerger of the Adhesives and Plumbing Businesses

CITI’S TAKE

Astral has announced a demerger of its plumbing and chemicals

Buy (adhesives+paints) businesses into two listed entities with mirror image

Catalyst Watch: Upside, expires 07-JUL-26 shareholding. Management expects the demerger process (statutory

Price (25 Jun 26 15:30) Rs1,486.90 approvals, shareholder/creditor approvals and listing) to be completed

over the next 9 months. According to Astral, the restructuring would help Target price Rs1,900.00

enhance strategic focus of both the entities and improve capital Expected share price return 27.8%

deployment discipline (capital generated by each business to be used for Expected dividend yield 0.4%

their own growth). Astral trades at ~29x 1-yr fwd EV/EBITDA (consensus), Expected total return 28.1%

at a premium to Supreme Industries (~20x) and other smaller pipe Market Cap Rs399,433M

producers (10-18x). While the plumbing business should continue to trade

US$4,235M at a premium (to competition) given its superior margin and growth profile,

the durability of valuations for the adhesives & paints segment remains

less clear. We maintain Buy on Astral on expected margin

improvement/market share gains from backward integration into CPVC Tejas PradhanAC

resin and continued double-digit volume growth in the plumbing +91-22-6175-9861

segment. tejas.pradhan@citi.com

Demerger of Adhesives and Paints Business – Astral’s board has approved 1) a

demerger and transfer of the chemicals business of Astral into Astral Chemie (a 100%

subsidiary of Astral Ltd) and 2) amalgamation of Al-Aziz Plastics (a 100% subsidiary

of Astral Ltd) into Astral Ltd.