Revenue growth was ahead of our estimates but EBITDA margins came in lower than expected.
Key triggers for future price performance
- Reported revenue growth of 33% YoY to Rs. 7096 crore (up 27% QoQ), led by volume growth of 33%
- Gross margins declined 966 bps YoY, resulting overall fall in EBITDA margin by 1090 bps YoY to 12.7%
- PAT declined 29% YoY to Rs. 605 crore, lower than our estimate of Rs. 886 crore
- The company took a price hike of 4% in Q2FY22 and has further guided to take price hikes to offset higher input prices
- Repainting represents ~80% of total decorative paint demand. Gradual reduction in re-painting cycle would drive future paint demand
- Increased focus on the 'water proofing & building chemical' category will continue to drive revenue growth for Asian Paints. Water proofing & building chemical industry is pegged at Rs. 6000 crore vs. Rs. 1.5 lakh crore in China
- Model revenue, earnings CAGR of 19%, 16%, respectively, in FY21-24E
For details, click on the link below: Link to the report
Shares of Asian Paints Limited was last trading in BSE at Rs. 2984.65 as compared to the previous close of Rs. 3003.50. The total number of shares traded during the day was 193344 in over 31734 trades.
The stock hit an intraday high of Rs. 3002.00 and intraday low of 2912.10. The net turnover during the day was Rs. 569544237.00.
Source : Equity Bulls