Asian Paints, Angel One Q1 Results Review: HDFC Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Institutional Equities .Asian Paints - Weak print; heatwave, general elections impact demand Asian Paints Ltd.’s revenue declined 2.3% YoY in Q1 to Rs 89.7 billion (our estimate: Rs 91.5 billion). Decorative clocked 7/-3% volume/value growth in Q1 and industrial business grew 5.8% YoY in Q1. Distemper, Neo Bharat (new product) and premium waterproofing performed well while economy emulsions struggled. Green shoots are visible in rural demand. June-24 witnessed demand recovery. Gross margin contracted 40 bps YoY to 42.5% (our estimate: 43.6%) courtesy raw material inflation (1.8% in Q1) coupled with supply chain challenges. Ebitdam contracted 422 bps to 18.9% (our estimate:21.3%) courtesy higher advertising and promotion spending (to defend share) and higher employee expenses. We’ve cut our FY25/26 EPS estimates by 3/2% to account for lower margins as higher supply (led by Birla Opus’ entry plus capacity additions across the sector) meets weak-to-average demand in FY25/26. Maintain Reduce with a DCF-based target price of Rs 2,750/share; implying 47 times June-26 price/earning. .Angel One - Changing the game rules; no more easy money Angel One Ltd. clocked a 4% QoQ growth in its topline and a 14% QoQ decline in adjusted PAT, driven by gains in overall equity market share, offset by IPL spends of Rs 1.15 billion. As highlighted in our note earlier this month, the SEBI directed exchanges and market infrastructure institutions to discontinue the practice of charging slab-wise fee structures linked to the turnover and levy uniform transaction charges instead. Our analysis suggested that this revenue stream contributes ~8% to the company’s top line and a material 20% to its pretax profits. While we flagged the pricing levers available to Angel One across the cash and F&O segments, we await the SEBI’s final directives on this issue and potential broader regulatory actions on the F&O segment before making any changes to our FY25E and FY26E estimates. The regulatory clampdown on core revenue pools notwithstanding, we maintain Add with a target price of Rs 2,750, valuing Angel One at 20 times Mar-26 EPS for its potent acquisition funnel and relatively secular business model. .Click on the attachment to read the full report:.Asian Paints Q1 Review - Weak Result Trend Continues, Recovery To Be Gradual: Nirmal Bang.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Asian Paints, Angel One Q1 Results Review: HDFC Securities

The brokerage cuts its FY25/26 EPS estimates marginally by 3/2% to account for lower margins and maintain its Reduce rating on Asian Paints.

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