Q1FY24 Preview: Asian Paints: Revenue seen at Rs. 92,525 million, PAT at Rs. 14,345 million

21 Jul 2023 , 02:29 PM

Result date: 25^th July, 2023

Recommendation: Reduce

Target price: Rs. 3,025

 

Asian Paints is likely to post high single digit volume growth over the year-ago quarter. Pricing growth is likely to be similar to volume growth. Overall, consolidated revenue growth is pegged at 7.6% relative to the year-ago quarter.

Decline in input costs coupled with improving product mix (lower salience of putty/commodity products) could aid the company’s profitability during the quarter. Analysts at IIFL Capital Services expect Asian Paints to report the highest EBITDA margin expansion of 440 basis points over the year-ago quarter within the paint companies under their coverage. 

The company’s Profit After Tax or PAT could grow 37.8% over the year-ago quarter. 

Important management insights to watch out for:

• Demand outlook across Metros/Tier 2/3 towns
• Outlook on movement in input costs, pricing actions 
• Competitive intensity

Rs. Million	June 2023 estimates	YoY change
Revenue	92,525	7.5%
EBITDA	20,824	33.8%
EBITDA margin	22.5%	440 bps
Profit After Tax	14,345	37.8%

Source: IIFL Research