Astral Poly Technik Ltd Management Discussions.

Indian Economic Review

India has emerge as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years backed by its strong democracy and partnership.

Indian economy registered a growth rate of 6.8% in 2018-19. India has retained its position as the 3rd largest start up base in the world with over 4,750 technology start up. Indias Foreign Exchange reserve has crossed US$ 400 billion mark which is the mark of stability for the country.

The M & A activity reached a record of US$ 129.4 billion in 2018 while private equity and venture capital investments reached US$ 20.5 billion.

• Merchandise export of India increased by 8.85% (US$ 298.47 billion).

• Service export has grown up by 8.5% (US$ 185.51 billion).

• Proceed through IPO reached US$ 5.5 billion 2018.

• India foreign Investment (FDI) equity inflow reached US$ 409.15 billion between 2002 to 2018.

• Consumer price index (CPI) inflation stood up at 2.57% in Feb. 2019.

Strengthened by the benefits derived from the structural reformssuchastheGoodsandServicesTax(GST)harmonization and bank recapitalization, uptick in domestic demand gained momentum in 2018. Further impetus was provided by the sustained investment growth, which has firmed as the effects of temporary factors wane.

Going into the next fiscal year, recovery in agricultural activity supported by robust domestic demand is estimated to uptick the GDP to 7.2% in 2019-20 and 7.3% in 2020-21. The growth will be further supported by continuous recovery of investment and robust consumption amid a more expansionary stance of monetary policy and some expected impetus from fiscal policy.

Indias GDP growth vis--vis other nations

Note: The above year represents Calendar year.

(Source: indicators/indias-gdp-expected-to-grow-at-7-3-in-2018-19/ articleshow/67451511.cms)

Indian Industry Overview

The pipe industry in India had witnessed a robust growth and has reached at an estimated value of र 280 billion by the end of FY 2018. This growth resulted due to high growth in the building and construction sector, automobile industry and growing medical hospitals. The CVPC pipe in India had been growing at a faster rate than the existing plastic pipe system. In order to encourage the sector, the Government of India (GOI) has been placing orders for sewage, water supplies and plumbing pipes. Continuous increase in allocation of irrigation and housing by Government of India is going to give momentum to the piping industry. With rapid growth in population, there has been an increase in demand of residential applications of pipes also. In recent time, there has been a drastic shift of demand from metal to polymer based pipes, especially in plumbing and piping application in the construction industry. This has led to increase in usage of plastic pipes and emergence of CPVC pipes for hot and cold water plumbing, firefighting. The production of CPVC piping industry requires huge investment in technology and expertise making it difficult for players to enter into this segment. As a result, this provides huge opportunities to the existing players to increase their market share and revenue in replacement as well as new construction. Going forward, the industry is expected to grow at a CAGR of 14% between FY 2018-2022. The growth will be on account of various government initiatives and growth in downstream industries including Infrastructure, plumbing, irrigation and telecom.

Government Initiatives

Various government initiatives in the downstream industries which are helping and contributing towards growth of piping industry are illustrated below:

Pradhan Mantri Awas Yojana- Housing for All (Urban)

This scheme is an initiative by GOI with an aim to provide affordable housing to urban poor people. It aims to build 20 million affordable housing by 31st marcर 2020. This scheme is implemented across 4,041 statutory towns with the initial focus on 500 Class I cities in India.

Smart Cities Mission

An urban renewal and retrofitting program by GoI with an aim of building 100 smart cities across the country. The core infrastructural requirement to develop Smart cities can be achieved with Smart solutions like E-Governance and Citizen Services, Energy Management, Waste Management, Urban Mobility, Water Management etc. The strategic components of area-based development in the Smart Cities Mission are city improvement (Retrofitting), city renewal (Redevelopment) and city extension (Greenfield development) plus a Pan-city initiative in which Smart Solutions are applied covering larger parts of the city.

Atal Mission for Rejuvenation and Urban Transformation (AMRUT)

The purpose of this scheme is to ensure that every households has access to a tap with a proper supply of water connections, construction of buildings etc. The essential components associated with this scheme are water supply, sewerage and storm water drainage etc.

National Rural Drinking Water Programme

The main objective of this scheme is to provide rural people adequate safe water for drinking, cooking and ensure that all the sections of the communities have access to safe drinking water. This scheme seeks to prevent the contamination of water.

Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)

Through this scheme the GoI aims to increase cultivation area with assured irrigation, reduce wastage of water and improve water use efficiency. The initiative not only on creating sources for assured irrigation, but also creating protective irrigation by harnessing rain water.

Growth Drivers

Features: The growth in demand of plastic pipes, especially CPVC, have been growing due to their distinct features such as quality, high durability and affordability.

Real-estate: With increase in demand for housing fuelled by various government initiatives and rise in per capita income has led to increase in demand for quality pipes.

Infrastructure: The Government of India is focusing on rural and sanitation infrastructure, which will increase the demand for plastic pipes. With the development of ‘smart cities in India, CPVC consumption will increase due to a huge requirement of urban infrastructure in these cities.

Housing: The demand for housing in the middle income group is massive in India. With a view to bridge the gap of supply, the government has been initiating measures by bringing in the concept of green building. With the given nature of CPVC pipes, their demand is expected to grow for the housing segment.

Irrigation: Government has been undertaken various initiative, such as Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), to insure proper irrigation facility. As a result, this is expected to augment the demand of PVC pipes as they are most suitable for irrigation purpose.

Company Overview

Astral Poly Technik Limited (APTL) is one of the leading manufacturers of Chlorinated Poly Vinyl Chloride (CPVC) and Poly Vinyl Chloride (PVC) plumbing systems, for both residential and industrial applications. The company enjoys a dominant market share in the domestic CPVC and PVC pipe industry. The Company has its pipe manufacturing facilities at Santej and Dholka (Gujarat), Hosur (Tamil Nadu), Ghiloth (Rajasthan), Sangli (Maharashtra), Sitarganj (Uttarakhand) and Nairobi (Kenya) for manufacturing of plumbing systems, drainage systems, agricultural pipes, industrial pipes, fire protection pipes, electrical conduit pipes and Infrastructure products.

The Company is also planning to commence its new manufacturing facility at Bhubaneshwar (Odisha).

The Company has its adhesive and sealant manufacturing facilities at Santej (Gujarat), Rania and Unnao (U.P.), Elland (U.K.) and Stanford (USA).


• Established brand in plumbing and other building materials industry.

• Strategically located warehouses and manufacturing facilities (West/South/North and Shortly in East) with extensive distribution channel.

• Strong track record of growth and financial performance.

• Continues to introduce new CPVC and PVC products.

• Pursuesgrowththroughselectiveacquisitionopportunities in India and internationally.

• Introduced many new products first time in India.

• Highest Quality certifications in piping industry.

• Most popular and recognised piping brand in India.

Business segment overview

Piping Business Overview

The fiscal 2019 was marked by many challenges including truck strike for at least 10 to 15 days and drop in price of PVC which hampered the sales and growth of the business. In spite of these challenges, the company had achieved growth of revenue by 21.1% to र 19,157 mn along with a volume growth of 18.27% in the FY 2019. Apart from growth, the company had also achieved the highest EBDITA of र 3,154 mn and PAT of र 1,415 mn registering a growth of 27.3% and 18.9% respectively. The company has continuously invested its money on research and development activities, as a result the company had been able to add new products like PEX-A PRO and range of products in the Infrastructure segment.

Company has successfully commenced its Ghiloth (Rajathan) manufacturing facility having capacity of 23,678 M.T.

Acquisition of Infrastructure Products Company:

During the year under review, the Company has acquired 100% stake in Rex Polyextrusion Private Limited ("Rex") situated at Sangli, Maharashtra having a vast product range such as DWC (Double Wall Corrugated), Telerex, Georex, Acqurex, Multirex, Plus Stirex etc These product range has a very bright business opportunity in India and abroad.


CAGR Growth in Piping Business between FY 16 -19


CAGR EDBITA in Piping Business between FY 16 -19

Adhesives Business Developments

The piping business in the company was traditionally considered to be a growth driver but now the adhesives business has shown a stable momentum. Resinova had evolved as the leading brand in adhesives and sealants, with an increasing market share in the adhesives segment. The UK and USA operations in Seal IT services had grown by 33.7% in terms of value and showed robust improvement in EBDITA margin which stood at 9.2% in FY 2019 as compared to 5.7% in the previous year. The recent launch of RESCUETAPE, RESIWOOD and RESIQUICK has been successful in capturing a considerable adhesive market share.


The Company believes in brand building and creating awareness of its product quality. The application of its products across multiple sectors like construction, irrigation and real estates among others is successfully done through effective branding. The company has stepped up the branding through shop- branding, exhibitions, spots branding and distributors meet. The Companys recent sponsorship of

Kolkata Knight Riders, Rajasthan Royals, and Sunrises Hyderabad in the Indian Premier League (IPL) has further helped in marketing the brand to a larger audience.

Distribution Network

The company has been consistently adding new distributors to widen its market presence. At present it has more than

800+ distributors and 30,000+ dealers in piping segment and 1,800+ distributors and approx. 4,00,000+ dealers in Adhesive segment across the country. Further to support this distribution network the company has 9 manufacturing facilities and 18 Depots across the country. With the addition of East plant, Company will be able to cover all the four zones of country for manufacturing facilities, which will help company in logistic cost saving and capturing the market share of respective zone.

Key Financial Ratio

( in million , except otherwise stated)




FY 18-19

FY 17-18

YOY Growth

FY 18-19

FY 17-18

YOY Growth

Revenur from operations





















EPS (H per share)







Debt Equity Ratio







Current Ratio







Debtors turnover (in days)

51 days

43 days

8 days

54 days

49 days

8 days

Inventory turnover (in days)

61 days

57 days

4 days

63 days

58 days

4 days








PAT Margin







Return on Net worth







Interest Coverage Ratio







Risk Management, Internal control and their adequacy

The Company has an elaborate Risk Management procedure in place, which covers Business Risk and Operational Risks, duly supported by policy framework. Major business and operational risks identified, are addressed through mitigating, controls and action plans. The company is addressing all key business risks on an ongoing basis. It has adequate Internal Control Systems and Procedures commensurate with the size of the company and its nature of business. The independent Internal Auditors continuously review the adequacy and effectiveness of the internal control systems vis-a-vis ongoing operations of the company, which provides reasonable assurance of adequacy and effectiveness of control, governance and risk management procedures to the Audit Committee. The recommendations of Internal Auditors and the Audit Committee are followed up effectively for implementation

Human resources

The company continues to maintain a strong relationship with its employees, in order to improve their efficiency level at the workplace. The company places great value to its employees through their commitment, competence and effort that is shown in different aspects of the business. It also confirms its commitment towards the development of HR policies,

For, Astral Poly Technik Limited

Sandeep P. Engineer

Managing Director

Date : 20th May, 2019

Place : Ahmedabad