Q1FY23 Preview: Asian Paints: Revenue seen at Rs80,988 million, PAT at Rs9,534 million

25 Jul 2022 , 11:24 AM

Result date: 26^th July, 2022
Recommendation: Reduce
Target price: Rs2,800

Strong growth in the waterproofing category due to seasonal factors will propel performance of Asian Paints during the June 2022 quarter. The company’s volume growth (in domestic decorative paints segment) is pegged at ~25% over the year-ago quarter. Overall, revenue is likely to grow 45% over the year-ago quarter.

EBITDA margin is likely to come in at 17.2%, versus 16.4% in the year-ago quarter. This, despite increasing input cost inflation. Part of this surge can be attributed to a better product mix in favor of high-margin products.  

Profit After Tax (PAT) could grow 67.7% over the year-ago quarter.

Important management insights to watch out for:
·         Commentary on input cost inflation
·         Outlook on demand across segments
·         Pricing actions planned ahead

Rs. Million	June 2022 estimates	YoY change
Revenue	80,988	45.0%
EBITDA	13,930	52.5%
Profit After Tax	9,534	67.7%

Source: IIFL Research