Asian Paints Ltd - Q3FY23 Result First Cut - YES Securities

Misses consensus expectations; Dom-Deco volume flat YoY (3-yr CAGR of ~16%)

- APNT's 3QFY23 Consolidated revenues was up by 1.3% YoY to Rs86.4bn. Consol. EBITDA grew by 4.5% YoY to Rs16.1bn. Adjusted PAT (APAT) grew by 5.6% YoY to Rs10.7bn.

- The Domestic Decorative (Dom-Deco) business registered a flat volume and value sales delivery for the quarter, below consensus estimate. The extended monsoon in October affected retailing in the peak festival season; but demand picked up in November and December leading to a double-digit growth for the Decorative Business in December. On a 3-yr CAGR basis, volume growth momentum has further come-off from 1Q & 2Q levels but still remained robust at ~16% (calculated).

- Consol. gross margins was up 180 bps YoY (up 280 bps QoQ) to 38.6%. Higher operating expenses: employee cost up 50 bps YoY and other operating expenses up 80 bps YoY, curtailed consol. EBITDA margins to 18.7%, up by just 60bps YoY.

- 3QFY23 Standalone revenue was flat YoY. EBITDA and APAT were up 1.8% and 6.4% YoY, resp. EBITDA margin was up 30 bps YoY to 19.9%.

Business highlights:

- International business sales increased by 2.1% YoY.
- Bath Fittings business sales decreased by 10.9% YoY.
- Kitchen business sales decreased by 7.1% YoY.
- Whiteteak (lighting) generated revenue of Rs 284.6mn in 3QFY23.
- Weatherseal (uPVC windows and doors) generated revenue of Rs 68mn in 3QFY23.
- APPPG (Industrial business) sales increased by 23.9% YoY.
- PPGAP (Industrial business) sales increased by 23.8% YoY.
- 9MFY23 Consolidated: Revenue, EBITDA and APAT grew ~21%, 31% and 33%, resp. Gross margin was up 80 bps YoY to 37.3% while EBITDA margin was up 130 bps YoY to 17.1%.

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 Result FirstCut YESSecurities