Astral could dent Pidilite's market share in long term: Analysts

 Astral, which recently acquired two new companies in the adhesives market, is believed to be a threat to market leader Pidilite in the long run Stock Market Trading Tips

Astral has established itself as a strong participant in the CPVC pipes and fittings sector and is said to have gained recognition as a progressive player in the other related sectors as well. 

An Edelweiss Securities report said although the entry of Astral will increase competition, the construction chemical space in India has enough scope for growth for all the players considering the low per capita consumption in the construction chemical space and adhesives. There is also a large unorganized market in this segment. 

"Considering the fact that most of the segments in the construction chemical space is also B2B, things work on relationship which Pidilite has been able to sustain for such a long time and it will not be easy to take clients from this players. Thus Astral might be able to gain some initial market share but not from Pidilite,'' said Abneesh Roy, associate director - institutional equities - research analyst, Edelweiss Securities Himanshu Tiwari Astrologer Blog

Astral acquired 76% stake in Resinova, one of the leading manufacturers of branded adhesives and sealant, construction chemicals, and industrial maintenance products, last year. Prior to that, it acquired an 80% stake in UK-based adhesives and sealants manufacturer Seal It Services. 

"Resinova's supply chain network consists of 11 branch offices and more than 1,700 channel partners reaching out to around 400,000 retail outlets across India. Astral Poly Technik is looking to consolidate its adhesive and sealant business in the coming years and is also augmenting its manufacturing facilities in India. Astral has higher chance of success due to its existing Adhesive distribution networks,'' Roy said in the report Indian stock market astrology prediction

Pidilite, which has a lion's share of over 70%, has sustained its market share gains even as the market has become competitive given the presence of other large companies and multinationals. An estimated 300 companies are said to be operating in this segment, where Astral is a relatively small player. 

The report said top seven players in construction chemical space account for around 50% of the market. The top five players based on revenues are Pidilite, BASF, SIKA, FOSROC and SWC.