Astra International (ASII IJ)

FY26 Outlook: Earnings Lift from Coal (UNTR) but Headwind from Macro Risks

• ASII booked a flat 4W sales volume in 2M26; we lower our FY26 growth expectation amid macro risks stemming from the Middle East conflict.
• We expect UNTR to benefit from higher gold and coal prices, which should more than offset the impact from Martabe and Pama’s volume.
• We raise our FY26-27 net profit est. by 2.3-7.5% with a lower TP of Rp7,050; while we maintain Buy rating, we assign a tactical (3M): N view, reflecting our more cautious macro view.

Auto: Solid 4W steady start to FY26, but macro risks temper outlook

ASII recorded a flat (-0.2%yoy) 4W wholesale volume growth in 2M26, underperforming the industry’s (+9.8% yoy), though we expect sales to improve as delivery of newly launched hybrid Veloz picks up pace in the coming months. While we continue to expect a positive year for the 4W segment, we trim our volume growth forecast to +2% yoy (vs. +8% prev.) to factor in potential impact of macro headwinds stemming from the ongoing Middle East conflict. We also revise down our 2W volume growth projection to 1% (from 3% yoy previously). Consequently, we slightly lower our auto distribution margin assumption to 2% (vs. 2.3% previously).

Uncertainty from Martabe and RKAB, but support from coal and gold px

We revise our assumptions to reflect Martabe’s operational halt and RKAB cuts, lowering gold production to 120k oz (from 204k), UNTR’s own coal production to 14.8Mt (from 18.2Mt), and Pama’s OB/coal to 935mbcm/125Mt (from 1.3bn/141Mt). Despite the volume cuts, we expect FY26 earnings to be supported by higher gold and coal prices (US$4,900/oz and US$130/t), partly reflecting energy supply disruptions amid the Middle East conflict. We raise our UNTR FY26–27 earnings est. by 8.4–22.6% (see our UNTR report).

Maintain Buy with a lower TP of Rp7,050; headwind from macro risk

Overall, we raise our FY26–27 net profit estimates by 2.3–7.5%, as the expected earnings upside from UNTR more than offsets our more cautious outlook for the Auto segment. We continue to expect strong growth from the Financial Services segment (FY26 operating profit growth of 7%), supported by healthy financing growth of +8% and a stable credit quality profile. We maintain our Buy rating with a lower TP of Rp7,050, reflecting our lower target multiple amid a higher risk premium. We assign a Tactical (3M): Neutral given the current macroeconomic uncertainty. A potential catalyst could come from the anticipated announcement of its strategic review in Jun26. Key risks include weaker-than-expected auto sales and an unfavorable outcome regarding Martabe’s legal status.

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