Q3FY23 Result Update - Asian Paints - ICICI Direct

Lower volume offtake drags topline; EBITDA margin recovery amid easing RM costs.

- APL reported a muted topline growth of ~1% YoY to ~Rs. 8637 crore dragged down by lower volume offtake. The volume offtake was flat YoY due to extended monsoons, lower demand (amid inflationary pressure) and unfavourable base of Q3FY22 (reported 18% volume growth)

- Easing raw material prices helped drive gross margin up 182 bps YoY (284 QoQ), helped drive EBITDA margin by 57 bps YoY (+414 bps QoQ) to 18.7%

- PAT increased albeit a slow pace of ~6% YoY to ~Rs. 1097 crore tracking an EBITDA margin recovery

Key triggers for future price performance

- Repainting represents ~80% of total decorative paint demand. A gradual reduction in the repainting cycle would drive future paint demand. In addition to this, increased government capex on infra & rural housing will help drive over paint demand

- Increased focus on launching of new products, strengthening of backward integration will drive an EBITDA margin recovery

- Model revenue, earnings CAGR of ~14%, ~18%, respectively, in FY22-25E

For details, click on the link below: Link to the report

Shares of Asian Paints Limited was last trading in BSE at Rs. 2788.10 as compared to the previous close of Rs. 2868.05. The total number of shares traded during the day was 189090 in over 39121 trades.

The stock hit an intraday high of Rs. 2850.10 and intraday low of 2782.50. The net turnover during the day was Rs. 530353964.00.

Source : Equity Bulls

Keywords

AsianPaints INE021A01026 Q3FY23 ResultUpdate ICICIDirect