Bonus Shares Alert: This Largecap Stock Will Trade Ex-Bonus Soon

Engineering stocks have shown a smart recovery post the pandemic with strong financial statements and better cost structures.

The industry witnessed robust order inflows in 2022. This was fuelled by government's central budgetary assistance for infrastructure development and private spending.

As a result, revenues saw a spike. Companies then decided to reward their shareholders by distributing profits with dividends and bonus issues.

Astral is one of those companies which is all set to reward shareholders with bonus shares.

Here's all you need to know.

• Astral announced bonus shares on 7 February 2023.
• The company will issue bonus shares in a ratio of 1:3. This means one bonus share for every three existing shares.
• The company will issue a total of 268,611,572 equity shares not exceeding Rs 268.6 million (m).
• The record date for the same is 14 March 2023.

Interestingly, this is not the first time the company has come out with a bonus.

The company did a bonus issue in 2021 in the ratio of 1:3.

Bonus issues tend to increase a company's share capital and liquidity while decreasing the stock price

They are distributed out of profit reserves, free reserves, or securities premiums.

Post the bonus issue, the paid-up share capital of the company, which now stands at Rs 201.4 m is expected to be around Rs 268.6 m.

A look at its financials

For the December 2022 quarter, the company's revenue was up 15% YoY to Rs 12.7 billion (bn) from Rs 10.9 bn in the same quarter last year.

Net profit fell 27% YoY and came in at Rs 930 m from Rs 1,273 m in the December 2021 quarter.

This decline in profit was on the back of margin pressure faced by the company's vertical due to the high-cost inventory of raw materials for both PVC and chemicals.

Over the last five years, Astral's revenue has grown at a CAGR of 16.6%, while net profit has grown at a 22.3% CAGR.

Higher growth in volumes and realisations in plumbing and paints aided the earnings.

Astral Financial Snapshot - 5 years

Particulars	18-Mar	19-Mar	20-Mar	21-Mar	22-Mar
Total revenues (Rs in m)	20,527	25,227	25,900	32,014	44,289
Growth (%)	-	22.8	2.6	23.6	38.3
Operating profit (Rs in m)	3,167.90	3,849.40	4,429	6,445	7,553
Operating profit margin (%)	15	15.3	17.2	20.3	17.2
Net Profit (Rs in m)	1,783	2,009	2,512	4,152	4,923
Net profit margin (%)	8.7	8	9.7	13.1	11.2

Source: Equitymaster

To maintain its growth trajectory, the company will continue to expand in the eastern region.

For the coming quarters, the company is planning to grow in the paints segment with the acquisition of Gem Paints.

It has also launched new products like valves and drainage products.

These products are likely to contribute Rs 15 bn to the sales revenue over the next five years.

It is also planning to enhance its network in new areas and improve its distributor and dealer network.

The company further seeks to double its consolidated revenues over the next five years.

How shares of Astral have performed recently

The share price of Astral has dropped by 3% in the past one month.

Over the past one year, shares of the company have declined 5%. While over three years, shares have given multibagger returns of 333% on the back of the constant rise in sale volumes.

The company touched its 52-week high of Rs 2,654.8 on 9 September 2022 and its 52-week low of Rs 1,581.6 on 20 June 2022.

Astral is currently trading at a PE (Price to Earnings) multiple of 113.7x, with the industry PE ratio being 17x.

About Astral

Originally incorporated as Astral Poly Teknik, Astral is a manufacturer and provider of CPVC piping and plumbing systems in India since 1999.

The company is the first licensee of Noveon USA (formerly known as the specialty chemical division of B.F Goodrich USA) to manufacture and market CPVC piping and plumbing system in India.

Its production facilities are present in Gujarat and Himachal Pradesh to manufacture plumbing systems from 1/2" to 8" in diameter.

Its products include CPVC pipes and fittings for hot and cold-water plumbing systems, CPVC industrial piping systems for the transportation of hazardous and highly corrosive chemicals.

To know more about the company checkout its Astral Financial Factsheet and quarterly results on our website.

You can also compare Astral with its peers:

Astral vs Finolex Industries

Astral vs Supreme Industries

For the companies with long history of issuing bonus, check out 5 Indian companies which have consistently declared bonus shares.

Also if u are looking for rewarding stocks in this bear market, check out our editorial, 3 stocks to watch out for bonus shares and stock split in February 2023.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...