Asian Paints Q3 results preview: Profit to grow 27-33%; margin expansion likely on ease in RM cost

Asian Paints Ltd is likely to report a 27-34 per cent year-on-year rise in net profit for the December quarter on a single digit rise in sales. Ebitda margin is expected to expand by over 150 basis points on sequential basis and over 300 basis points on YoY basis on moderation in raw material (RM) prices. Volume growth is seen healthy on the back of shifted festive dates and also after paints companies initiated price cuts of about 1.5 per cent in November.

Equirus Securities is pencilling in a 7 per cent sales growth and a 9 per cent domestic decorative paints volume growth despite elongated festive season. Waterproofing, economy range and other ancillary products would witness higher growth, the brokerage said as it expects margin at 22.1 per cent to be higher than the management guidance of 18-20 per cent due to benign raw material environment, partly offset by higher A&P spends.

This brokerage sees profit after tax at Rs 1,434.60 crore against Rs 1,077 crore YoY, up 33 per cent. It sees sales rising 7 per cent to Rs 9,213 crore and expects Ebitda margin at 15 per cent.

Also read: Stock recommendations by analysts for January 17, 2024: AB Capital, Cipla and UBL

Prabhudas Lilladher expects Asian Paints to log 30 per cent jump in profit at Rs 1,425.70 crore on 8 per cent rise in sales at Rs 9,327.70 crore. Asian Paints is expected to deliver volume growth of 11 per cent YoY, this brokerage said, as it sees increased demand due to festive & wedding season along with price cuts.

Nomura India sees adjusted profit at Rs 1,372.60 crore, up 28 per cent. This brokerage sees revenue for Asian Paints rising 4.9 per cent to Rs 9,055.50 crore. Ebitda margin is seen expanding 340 basis points YoY to 22.1 per cent from 20.2 per cent. On QoQ basis, margin is seen improving 181 bass points over 18.7 per cent in the September quarter.

PhillipCapital sees double digit volume growth owing to distribution expansion initiatives and a shift in festive season. Gross margin to improve on back of moderation in RM index, it said adding that the flow-through of gross margin gains would help operating margins as well.