Karachi, August 17, 2021 (PPI-OT): ASTL: Riding the construction boom

ASTL held its analyst briefing on Friday to apprise investors about company’s financial performance and future outlook. To recall, company posted PAT of PkR1.37bn (EPS: PkR4.61) in FY21 vs. net loss of PkR1.24bn in the same period last year.

The phenomenal growth in FY21 came on the back of increased revenue, up 48%YoY to PkR39.2bn mainly attributable to i) impressive volumetric growth of 33%YoY where rebar sales clocked in at 375.7K tons (+33%YoY) in FY21, and ii) higher avg. retention prices of rebar +11%YoY.

Earnings outlook for the company remains robust with ASTL targeting volumetric growth of +20%YoY to 420-450K tons rebar dispatches for FY22 through increasing North’s share to 50% which is already +5.31pptYoY in FY21 to 38%.

We expect the sector including ASTL to remain in limelight on the back of government’s continued support to construction sector. The company currently trades at FY22 P/E of 8.2x while 3-yr PEG stands at 0.45x with our TP of PkR64/sh providing a capital upside of 50% from last close.