Asian Paints Ltd. share price target

Asian Paints has posted a mixed set of results in 3QFY18. While its consolidated revenues grew by 10.5% YoY to Rs42.6bn missing our estimate of Rs45.6bn, EBITDA rose by 17.7% YoY to Rs8.9bn marginally ahead of our estimate of Rs8.8bn. Its net profit increased by 19.6% YoY to Rs5.7bn,...

Asian Paints has posted a mixed set of results in 3QFY18. While its consolidated revenues grew by 10.5% YoY to Rs42.6bn missing our estimate of Rs45.6bn, EBITDA rose by 17.7% YoY to Rs8.9bn marginally ahead of our estimate of Rs8.8bn. Its net profit increased by 19.6% YoY to Rs5.7bn,...

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.

Mixed Bag Volume disappoint but margins ahead of estimate. On a consolidated basis, revenues grew by just 10.9% yoy to Rs42.7bn (est: Rs46.4bn) while EBITDA increased by 17.7% yoy to Rs8.9bn in-line with our estimates and APAT at Rs5.5bn up by 21.6% yoy We estimate domestic decorative volume growth of c.6% as demand is yet to reach to pre GST levels and early festive season in Q2 impact Q3 volumes. Demand, particularly in...

An early festive season coupled with re-stocking of inventory (as GST impact subsiding) helped drive the volume growth of Asian Paints (APL) by 9% YoY (decorative segment) in Q2FY18. Additionally, the price hike to tune of ~5% helped in sales growth of ~14% YoY. However, the automotive coating JV (PPG-AP) witnessed subdued demand in the auto OEM and general industrial business segment. Under overseas operation, Nepal, Bangladesh, Oman and Bahrain witnessed healthy topline growth...

Asian Paints has posted an impressive set of numbers for the quarter ended Sept'17 beating our revenue and earnings estimates by 6% and 2%, respectively. Its consolidated net sales rose by 15% YoY to Rs42.7bn, while net profit (excluding exceptional income) grew by 7.5% YoY to...

costs (-60bp YoY), leading to EBITDA margin contraction of 20bp YoY to 18.8%. 1HFY18 performance: Sales rose 10.7% YoY, while EBITDA and adj. PAT fell 3.6% and 7.3%, respectively. EBITDA margin shrunk 270bp YoY to 20.9%. Standalone performance: Net sales grew 16.1% YoY to INR36b. Gross margin shrunk by 340bp YoY to 42.2% and EBITDA margin by just 40bp YoY to 22.2%. Thus, EBITDA grew 14.1% YoY to INR7.2b. Adj. PAT was up 8.8% YoY to INR4.7b....

Revenue fell by 2.38% to Rs. 3815.22 Cr in Q1FY18 when compared to the previous quarter. Revenue fell by 2.38% to Rs. 3815.22 Cr in Q1FY18 when compared to the previous quarter.

Asian Paints (APL) recorded muted volume growth of ~2% YoY in Q1FY18 due to a sharp decline in primary sales in May 2017 and June 2017. This was on account of de-stocking of inventory at dealer level before implementation of GST. Additionally, the company has taken price hike of ~3% YoY to partly offset the higher raw material cost. Further, industrial paint demand (automotive, powder coating) stayed intact in the auto OEM and industrial liquid paint segment APL recorded ~450 bps decline in gross margin due to an increase in...

Revenues in Line; Higher Cost Impairs Profitability Asian Paints has reported a mixed set of numbers for 1QFY18. While its consolidated net sales grew by 6.4% YoY to Rs38.2bn in line with our estimates, EBITDA and net profit came in sharply below our estimates. While EBITDA fell by 18.5% YoY to Rs6.7bn vs. our estimate of Rs8.1bn, net profit decreased by 20.4% YoY to Rs4.4bn vs. our estimate of Rs5.7bn. Considering the sharp fall in earnings, we have revised our net profit estimate downwards by 10% for FY18E and 7% for FY19E and now we expect the Company to post revenue and earnings CAGR of 14.2% and 12.6% through FY17-19E. Considering the rich valuations at 43.1x FY19E earnings...