Asian Paints Q3 Results Review - Strong Volume, Margin Delivery With Positive Near-Term Outlook: Systematix

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..Systematix Research Report.Asian Paints Ltd. delivered a revenue/Ebitda/profit after tax growth of 5.4%/27.6%/34.5%, a beat on consensus earnings with better-than-expected volume and margin performance, partially offset by inferior mix and muted international business. Volume growth in decorative paints sustained the four-year trajectory ~15% coming in at 12% for Q3, despite some relative softening post the strong festive season led by a pick-up in tier III, IV and rural markets. A deterioration in mix in favor of economy products and a 1% price cut led to a lower growth in value terms. Margins reached multi-year highs given continued material deflation. Going forward, Asian Paints expects to sustain a double-digit volume growth which should help deliver a high single-digit revenue growth for the next four-five quarters. We believe the management guidance of 18-20% Ebitda margins looks conservative in light of continued weakness in input prices. Gross margin cushion to significantly increase brand building spends, aggressive thrust on innovative products and services, upcoming backward integration projects from CY26 and strong scale-up in home décor business should position the company in a strong position to tackle impending competition in the paints space and protect its market share in our view. .The stock is currently trading at 54 times FY25 and 49 times FY26 consensus earnings for a 10%/15% expected revenue/earnings per share compound annual growth rate over FY23-26 with 27-28% expected return on equity. We see the current demand trends sustaining in addition to some upgrades to consensus estimated on the margin front. Despite competition and valuation headwinds, we see the stock sustaining current multiples given the positive volume and margin outlook..Click on the attachment to read the full report:.Asian Paints Q3 Results: Profit Rises 34.5%, Beats Estimates.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 Q3 Results Review - Strong Volume, Margin Delivery With Positive Near-Term Outlook: Systematix

Asian Paints delivered a revenue/Ebitda/PAT growth of 5.4%/27.6%/34.5%, a beat on consensus earnings with better-than-expected volume and margin performance

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