Asian Paints (APNT) reported consol. sales growth of 10.5% YoYto INR42.6b in 3QFY18, with volume growth of ~6% (est. of +15%) in the domestic decorative paints business. EBITDA and adj. PAT grew 17.7% and 19.6% YoY, respectively. Gross margin shrunk sharply by 150bpYoY to 42.2%. Increase in raw material cost YoY was offset by lower other expenses (-270bp YoY) and employee costs (-10bp YoY), leading to EBITDA margin expansion of 130bp YoY to 20.9%. Standalone performance: Net sales grew 10.7% YoY to INR36b. Gross margin shrunk by 90bp YoY to 43.5%, while EBITDA margin expanded 210bp YoY to 22.7%, as other expenses contracted 270bp YoY. Thus, EBITDA grew 21.9% YoY to INR8.2b. Adj. PAT was up 24.2% YoY to INR5.3b.