Q3FY24 Preview Asian Paints: Revenue seen at Rs. 95,004 million, PAT at Rs. 13,128 million

16 Jan 2024 , 11:59 AM

Result date: January 17, 2023

Recommendation: Reduce

Target price: Rs. 3,000    

Analysts at IIFL Capital Services expect paint industry’s revenue to grow by 10% over the year-ago quarter, on a favorable base, owing to festive demand mismatch. They note that there is a notable pick up in the December quarter sales versus sales in the September quarter, in a year of late Diwali. 

Higher sales growth and some Gross margin expansion could aid overall margins. Gross margin is likely to remain at current levels/slightly improve with Crude/TiO2 prices falling sequentially. 

The company’s Profit After Tax or PAT could grow 22.4% as compared to the year-ago quarter.

Important management insights to watch out for:

• Demand trends across segments and markets
• Outlook on margins
• Take on competitive scenario, especially entry of Grasim in the sector 

Rs. Million	December 2023 estimates	YoY change
Revenue	95,004	10.0%
EBITDA	20,560	27.6%
EBIT margin	21.6%	290 bps
Profit After Tax	13,128	22.4%
PAT margin	13.8%	140 bps

Source: IIFL Research