ASTRAL - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.4

🧪 Fundamental Analysis Summary

Astral Ltd. (ASTRAL) is a well-established player in the building materials and piping segment, known for its innovation and brand strength. While its ROCE of 20.3% and ROE of 15.2% reflect solid capital efficiency, the P/E of 73.5 and an extremely high PEG ratio of 26.3 suggest the stock is significantly overvalued relative to its earnings growth. The recent decline in price and weak RSI indicate bearish sentiment, which could present a better entry opportunity if fundamentals stabilize.

Metric Value Interpretation

P/E Ratio 73.5 Excessively high — valuation risk

PEG Ratio 26.3 Extremely overvalued — growth not justifying price

ROE / ROCE 15.2% / 20.3% Strong — efficient use of capital

Dividend Yield 0.26% Very low — not attractive for income seekers

Debt-to-Equity 0.06 Excellent — minimal leverage

EPS ₹19.5 Decent — but not enough to justify current valuation

PAT Growth (QoQ) -1.77% Slight contraction — short-term earnings pressure

Book Value ₹135 Price-to-book ~10.5× — expensive

RSI / MACD 34.6 / -14.5 Bearish — oversold territory, possible reversal zone

DMA 50 / 200 ₹1,471 / ₹1,549 Price below averages — weak trend

52W Price Range ₹1,232 – ₹2,214 Near lower end — potential accumulation zone

FII/DII Change -0.02% / +0.11% Flat — neutral institutional sentiment

📉 Ideal Entry Price Zone

Entry Zone: ₹1,250 – ₹1,380

RSI near oversold levels and price close to 52-week low.

Wait for signs of earnings recovery or PEG ratio normalization before aggressive entry.

🧭 Exit Strategy & Holding Period

Holding Period

3–5 years — suitable for long-term growth if valuation cools and earnings resume upward trajectory.

Exit Strategy

Consider trimming if price rebounds above ₹1,800 without matching EPS or PAT growth.

Reassess if ROE drops below 12% or PEG ratio remains above 10.

Key Metrics to Monitor

ROCE consistently above 20%

PEG ratio falling below 2.0

PAT growth resuming > 15% YoY

EPS trending toward ₹25+

🧠 Final Thoughts

Astral is a fundamentally strong company with low debt and solid capital efficiency, but its current valuation is a major concern. The stock is in a technical downtrend, which may offer a better entry point soon. Long-term investors should wait for valuation to align with earnings growth. If already holding, patience is key—consider partial exit on sharp rallies unless fundamentals improve.

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