Technical Check: This large-cap pipe company inches closer to breakout; see fresh 52-week high in 6-9 months

Astral Ltd (formerly known as Astral Poly Technik Limited) is an Indian multinational conglomerate headquartered in Ahmedabad rose 86 per cent in the last year compared to 26 per cent gains seen in the Nifty50.

The company with a market capitalization of more than Rs 48,000 crore hit a fresh 52-week high of Rs 2,466 on 5 January.

The large-cap stock, which has been a consistent wealth creator according to a wealth study by Motilal Oswal conducted last year, is likely to hit a fresh 52-week high as the stock inches closer towards the breakout level of Rs 2,419, suggest experts.

A break above Rs 2,419 could take the stock towards Rs 2,820 in the next 6-9 months, suggest experts.

Technical Astral that closed flat at Rs 2412 on Thursday is trading well above its crucial short and long-term moving averages placed at 30,50,100 and 200 Days Moving Average.

Astral Ltd was established in 1996, with the aim to manufacture pro-India plumbing and drainage systems in the country. It has also forayed into an adhesive business over years.

Piping Division which controls 77 per cent of the revenues is the main business of the company, it manufactures pipes and fittings for plumbing, sewerage, agriculture, industries, fire sprinklers.

It also manufactures pipes for conduit & cable protection, ancillary products, urban infra, and ducting.

Adhesives Division that controls 23 per cent of the revenues sells a wide range of products viz. Epoxy adhesives & putty, silicone sealants, construction chemicals, PVA, cyanoacrylate, solvent cement, tapes, and other products.

The company entered this business via acquisition of Resinova Chemie Limited and Seal IT Services. Resinova Cehmie is situated in India, while Seal IT is situated in the UK and has a presence in the UK and the US.

Pricewise, the stock is in a long-term uptrend forming a higher top and higher bottom on the weekly chart i.e., each new high after an up move is higher than the previous high, and each new low after a decline is higher than the previous low.

“For the last 3-months has been rangebound trading between 2430 and 2060 odd levels. It has been consolidating gains after the up move and formed a base for next leg of the up move,” Ashish Chaturmohta, Director Research, Sanctum Wealth, said.

“In last couple of weeks stock has rallied to the upper end of the range on high volumes indicating buying participation in the stock,” he said.

Chaturmohta further added that the stock can be bought levels and on dips to 2375 with a stop loss of 2285 for a target of 2820 in the coming 6-9 months.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)