Astral to begin production at Hyderabad pipe unit end Aug, CFO says
Informist, Tuesday, Aug 20, 2024
--Astral CFO: To begin output at upcoming Hyderabad pipe unit end Aug
--Astral CFO:Hyderabad pipe unit to have 20,000-tn capacity in phase 1
--CONTEXT: Astral setting up new 60,000-tn pipe unit in Hyderabad
--Astral CFO: Hyderabad unit to serve Andhra, Telangana markets
--Astral CFO: Hyderabad unit to cut logistics cost by 4-5%
By Sunil Raghu
AHMEDABAD - Astral Ltd will begin commercial production of pipes from its upcoming Hyderabad plant by the end of August, Executive Director and Chief Financial Officer Hiranand Savlani said. Astral is setting up a 60,000 tn per annum pipe-making plant at Hyderabad. "We should be able to begin commercial production from Hyderabad unit by end of the month," Savlani told Informist.
"We plan to operationalise 20,000 tn capacity at Hyderabad in the first phase," he said.
The company had earlier hoped to begin commercial operations at the unit by July. However, a delay in getting power connection to the unit put off the commercial operations.
Astral has spent 1.50-1.75 bln rupees on the Hyderabad plant, which would be fully operational in three phases. The CFO, however, did not specify the timeline by when the plant would achieve full commercial capacity of 60,000 tn.
Astral has two key business verticals--the first being plumbing and paints, and the second adhesives. Plumbing includes pipes, fittings, water tanks, faucets and sanitaryware.
The current installed capacity of the company is nearly 334,000 tn. The current capacity utilisation of Astral's plants stands at 67-68%, Savlani said, adding that he expects utilisation to rise in the second half of the year, which is generally operationally better for the pipeline industry. He said this would help the business achieve the 15% volume growth target, in line with their annual guidance for 2024-25 (Apr-Mar).
The company, in its analyst call post Apr-Jun earnings, had said that it had achieved a 16% rise in sales volume in the quarter. At 1504 IST, shares of Astral traded 1.3% higher at 1,907.50 rupees on the National Stock Exchange.
The company believes that once operational, the Hyderabad plant would be able to cut its logistics costs by 4-5% as it would be closer to its markets of Andhra Pradesh and Telangana. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
