Astral Limited — Q2 FY26 earnings call

Call held 6 Nov 2025

Management summary

Astral Limited delivered robust Q2 FY26 results with strong volume and value growth, and significant EBITDA margin expansion, driven by new product introductions, plant decentralization, and market share gains. Despite volatile polymer prices and weak industry demand, the company's diversified portfolio and strategic investments are yielding positive outcomes. The UK adhesive business is turning around, and new plants are set to contribute substantially, though the paint business faces near-term margin pressure from higher costs.

Highlights

  • Astral reported 20% volume growth and 15% value growth in Q2 FY26, reflecting strong performance despite industry volatility.

  • EBITDA margin saw a 20% growth in Q2 FY26, with consolidated margins stable at 15-16%.

  • New product categories like water tanks, valves, and fire sprinkler pipes contributed to healthy margins and growth.

  • The Hyderabad and Kanpur plants are ramping up, expected to drive significant volumes and market share.

  • The UK adhesive business is showing substantial improvement in growth and margins, targeting double-digit figures next year.

Concerns

  • The polymer industry is experiencing high price volatility, posing a challenge for the business.

  • Overall industry demand was weak, compounded by extended monsoon and slow government spending.

  • The paint business is currently facing margin pressure due to increased employee and other operational costs.

  • New plants (Hyderabad, Kanpur) are currently operating at low utilization, incurring initial losses before achieving optimal efficiency.

Key financials

2 periods

Headline

  • Volume Growth
    20%
  • Value Growth
    15%
  • EBITDA Margin Growth
    20%
  • Consolidated EBITDA Margin
    15%

Q2

  • Topline Growth
    5%

What they filed

Q1 FY27: revenue up 15.9%, net profit up 51.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,370 1,397 1,681 1,361 1,577 +15%1,542 +10%2,088 +24%1,578 +16%
EBITDA210 219 302 185 257 +22%237 +8%383 +27%231 +25%
Net profit109 113 178 79 135 +24%108 −4%213 +20%120 +52%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Plumbing (H1 FY26)
    15.8% Growth
  • Adhesive India (H1 FY26)
    15.8% Growth
  • Adhesive UK (H1 FY26)
    5.2% Growth
  • Paint (H1 FY26)
    17.1% Growth
  • Bathware (H1 FY26)
    13.8% Growth

Order book

low confidence
Management noted an improving order book for the Bathware business, indicating future scale-up, but did not provide specific quantified figures for the overall order book.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹300 Cr
    • All verticals (last four years) ₹1,400 Cr
    • Bathware specific ₹30 Cr

    Previously planned ₹300 Cr

    Astral has spent Rs. 1,400 crores in CAPEX in the last four years in all verticals and now it is the time to utilize the same and generate cash flows and growth in all the businesses across the sectors we are in.
  • Liquidity Liquidity disclosed The company has improved its net working capital cycle.
    Also I am sure you must have gone through the working capital side number also, we have improved the net working capital cycle also in this difficult time also and we will keep controlling this working capital cycle in the coming time also.

Guidance & targets

Growth

  • Adhesive Business Growth Rate Growth · coming fiscals · High confidence 15%
    Adhesive business as usual, the business is steadily growing at 15% run rate and we are confident that it will keep growing at the same run rate in coming fiscals.

    — Sandeep Engineer

  • UK Business Sales & EBITDA Improvement Growth · by March (end of this fiscal) · High confidence substantially improving
    But by this end of this fiscal by March we will be substantially improving both on the growth in the overall sales in value terms and even in the EBITDA margin.

    — Hiranand Savlani

  • Paint Business Growth Growth · full year · High confidence 20%
    This year we have given a guidance of 20% growth for the full year and we are going to achieve it as per the guidance given by us.

    — Sandeep Engineer

  • Bathware Business Growth Growth · next 5 years · High confidence 20%-25%
    Bathware we will aim to grow at about 20%-25% for the next 5 years.

    — Kairav Engineer

Margin

  • Adhesive Business EBITDA Margin Margin · coming fiscals · High confidence 15% to 16%
    You have also seen that EBITDA margin is also very stable and moving in the range of 15% to 16% continuously. We are confident that this run rate will continue in coming fiscals.

    — Sandeep Engineer

  • Paint Business Margin Margin · FY'27 · High confidence single digit
    It should be single digit margin in FY'27.

    — Hiranand Savlani

Capacity

  • CPVC Plant Completion Capacity · by September 2026 · High confidence completion
    we will be finishing the installation of machinery and construction of the CPVC plant by next year, by September 2026

    — Sandeep Engineer

  • CPVC Plant Capacity Capacity · initial · High confidence 40,000 MTPA
    So just wanted to understand with the 40,000 MΤΡΑ capacity, so what could be the captive consumption of the production what we take right now?

    — Pujan Shah

  • CPVC Plant Capacity Expansion Capacity · future · Medium confidence 80,000 metric tons
    So we can go up to 80,000 metric tons also. We have a space, we have a land available.

    — Hiranand Savlani

Capex

  • FY26 CAPEX Capex · full year · High confidence Rs. 300 crores-Rs. 350 crores
    So whatever we have given the guidance it is going to remain same. We are not going to incur more.

    — Hiranand Savlani

Market context

  • Overall Volume Growth Volume · H1 FY26 · High confidence double digit
    If you have seen H1 basis we have already reached the double digit number and historically also if you see the H2 is much better than the H1. So we are also expecting this year also that the H2 should be better than the H1.

    — Hiranand Savlani

  • Overall Volume Growth Volume · FY26 · High confidence double digit
    I think we have already given a guidance of double digit we have never said that we are going to deliver 17%. So we stand by with the 17%.

    — Hiranand Savlani

  • UK Business Revenue & EBITDA Growth Growth · next year · High confidence double digit
    We have put in a new CEO from India who has taken charge of the company and having very good experience of 25 years plus in this segment and we are positive that in coming time we will be back to our normal growth of double digit in revenue EBITDA.

    — Sandeep Engineer

What to watch in Q3 FY26

UK business growth and margin improvement

by March (end of this fiscal) and next year
Current Substantially improving growth and margin in Q2
Target Double-digit growth in revenue and EBITDA

Why it matters

Turnaround of the UK adhesive business is a key focus for overall profitability and international expansion.

But by this end of this fiscal by March we will be substantially improving both on the growth in the overall sales in value terms and even in the EBITDA margin.

Risks & concerns

  • Volatile polymer prices

    medium

    The polymer industry is passing through a volatile time with highly fluctuating prices.

    Management acknowledged

  • Weak industry demand and slow construction activity

    medium

    Overall demand was weak due to high monsoon, low government spending, and slow construction activity.

    Management acknowledged

  • Margin pressure in Paint business

    medium

    Increased employee and other costs from new depots are putting pressure on paint business margins.

    Management acknowledged

  • Uncertainty regarding Anti-Dumping Duty (ADD) on polymer

    medium

    The decision on ADD for polymer, expected by November 12th, could significantly impact polymer prices and market dynamics.

    Both acknowledged

Q&A highlights

8 direct
Plumbing growth in H2 and overall double-digit growth Direct
we have already given a guidance of double digit we have never said that we are going to deliver 17%. So we stand by with the 17%.

Clarifies management's commitment to double-digit growth and sets expectations for H2 performance.

Asked by Shravan Shah

QOQ plumbing realization and CPVC contribution to growth Direct
See product mix has improved and that is the region you see there is a substantial improvement in the margin compared to Q1. So definitely the all value-added product contribution has gone up.

Explains the driver behind margin improvement, attributing it to a favorable product mix shift towards value-added products like CPVC.

Asked by Shravan Shah

EBITDA per kg vs. percentage EBITDA and price aggression Direct
My humble request to every analyst is that that we are always communicating that per EBITDA is not the right way of looking at our Company because every quarter the product mix is changed... it is always better to look at the percentage of EBITDA.

Management clarifies their preferred profitability metric (percentage EBITDA) and explains their balanced approach to pricing and market share gains.

Asked by Keshav Lahoti

Channel inventory levels and potential impact of ADD Direct
Channel inventory levels are still subdued and channel is still not having the confidence of stocking much inventory. So I think after the ADD announcement some positive channel inventory built up might be there but as of right now channel inventory is very low.

Provides insight into current market sentiment regarding inventory and the potential for channel stocking if Anti-Dumping Duty (ADD) is implemented.

Asked by Praveen Sahay

Profitability of new plants (Hyderabad, Kanpur) and operating leverage Direct
Shaleen your understanding is absolutely correct, because right now we are incurring losses on new plant because utilization is hardly anything... So now that time has come and still you are right that still it is not at the optimum level of utilization hardly any level of utilization.

Confirms that new plants are currently underutilized and impacting profitability, but are expected to drive future margin expansion through operating leverage.

Asked by Shaleen Kumar

Rationale for in-house CPVC manufacturing Direct
no company will sell the multinationals to us even if we buy the whole capacity 100% to one company. Secondly Lubrizol will sell at their own margins and things... improvement in the raw material cost and it will help us go backward and maintain our margin... self-dependency

Explains the strategic importance of backward integration for CPVC, emphasizing cost control, supply security, and margin protection against external suppliers.

Asked by Pujan Shah

Impact of ADD on PVC prices and channel filling Direct
If the Rs. 5-Rs. 6 price rise will happen and my personal understanding is that and whatever I am talking to the supplier everyone is saying that this much price rise will be immediate wages. It will not take much time. Within 30 days 5-6 rupees price can come up and, in that case, definitely the channel filling will be very fast.

Highlights the potential for immediate PVC price increases and rapid channel stocking if the Anti-Dumping Duty (ADD) is imposed.

Asked by Shaleen Kumar

Strategic positioning and long-term profitability of Bathware business Direct
initially, any business may not be a margin lucrative. It is going to be there only after a certain scale... But one thing is good that you can see that in a span of 2.5 years, we have reached at this scale... this business is also going to be a profitable business for Astral.

Provides context on the long-term strategic vision for the Bathware segment, indicating its eventual profitability and importance despite current scale.

Asked by Tanya Kothary

3 min read 7 chapters

Detailed narrative

Q2 FY26 Performance Overview

Astral Limited reported strong Q2 FY26 results, achieving 20% volume growth and 15% value growth despite a volatile polymer industry. The company's EBITDA margin grew by 20% in the quarter, reflecting improved profitability. Consolidated EBITDA margin remained stable within the guided range of 15% to 16%. The topline for Q2 grew by 5%, indicating a healthy operational quarter.

Pipe Business Dynamics & Market Share

Despite overall weak industry demand and extended monsoon, Astral's pipe business demonstrated good growth, driven by decentralized plants and new geographical presence. This strategy helped the company gain market share, particularly in value-added products and CPVC. The company has invested ₹1,400 crores in CAPEX over the last four years across all verticals, which is now expected to generate cash flows and growth.

New Product & Plant Contributions

New product categories introduced in the last 3-4 years, such as water tanks, valves, fire sprinkler pipes, OPVC, PTMT, and low-noise pipes, have shown good performance and contributed to healthy margins. The Hyderabad plant has commenced operations and is picking up volumes, with the Kanpur plant also gearing up. Both plants are expected to significantly boost volumes and market share in the coming months, despite currently operating at low utilization and incurring initial losses.

Adhesive Business Performance

The adhesive business continues its consistent growth at a 15% run rate, with management confident of maintaining this pace in coming fiscals. The EBITDA margin for this segment remains stable at 15% to 16%. The UK adhesive business, which previously faced challenges, is now showing substantial improvement in growth and margins, targeting double-digit revenue and EBITDA growth for the next year following a change in leadership and becoming a 100% subsidiary.

Bathware & Paint Business Updates

The Bathware business grew 20% in H1 FY26, with increasing acceptance in new projects and an improving order book, signaling future scale-up. The Paint business, following the acquisition of Gem paint, recorded 19% growth in H1. Despite opening 9 new depots in Gujarat, Rajasthan, and Maharashtra, which led to higher employee and other costs and margin pressure, the company expects substantial improvement in growth and margins by the end of this fiscal and into FY27, targeting 20% full-year growth.

CPVC Manufacturing Strategy & Capacity

Astral is progressing with its in-house CPVC plant, with design work nearing completion and construction slated to begin next month, aiming for completion by September 2026. This backward integration is a strategic move to ensure raw material security, control costs, and maintain margins. The plant will have an initial capacity of 40,000 MTPA, with the potential to expand to 80,000 MTPA, and is expected to be cash-flow neutral, funded by working capital savings.

Capital Expenditure & Working Capital

Astral incurred ₹282 crores in CAPEX during H1 FY26 and reiterated its full-year guidance of ₹300-350 crores. The company emphasized that these investments in new plants, while initially impacting costs due to low utilization, are crucial for future cash flow generation and growth. Furthermore, the company has successfully improved its net working capital cycle, which is vital for funding ongoing projects and expansions.

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