Asian Paints Q3 Result Review - Overall Improvement Expected Here On: Dolat Capital

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Dolat Capital Report

Asian Paints Ltd.’s Q3 FY23 revenues were below our estimates. The company reported flattish volume growth in the decorative segment on an unfavorable base of 18%. The performance was partially impacted by extended monsoon.

Nevertheless, gross margin improved 180 basis points on price hikes and favorable cost environment – resulted in 60 bps improvement in Ebitda margin. Hence Ebitda and adjusted profit after tax came in line with estimate.

On three-year basis, Asian Paints reported 16/17% volume/value compound annual growth rate.

We believe that the company would continue to report double digit volume growth in the long run benefiting from industry growth and its leadership, planned capacity addition over four to five years and ongoing acquisitions.

We have downward our earnings per share estimates for FY24/25E by 4/1% to Rs 55.5/66.3 respectively to factor in Q3 performance. Considering recent price hikes and commodity deflation we expect margins to improve here on.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.