Result-Analysis-Elite-Wealth
Result Analysis: Asian Paints Ltd. Result Update Q4FY22

 


    Open FREE* Demat & Trading Account & ₹0 AMC for first year


    Particulars (In Rs. Cr.) Q4FY22 Q3FY22 Q4FY21 QoQ %      YoY%
    Revenue from Operations 7893 8527 6651 -7.4% 18.7%
    Other Income 80.39 71.81 75.41 11.9% 6.6%
    Total Income 7973 8599 6727 -7.3% 18.5%
    Raw Material Consumed 4173 4085 3436 2.2% 21.5%
    Raw Material as % of Sales 52.88% 47.91% 51.65% 497 bps 123 bps
    Stock Adjustment -327.49 381.6 -327.43
    Purchase of finished Goods 992.1 927.3 671.5 7.0% 47.7%
    Employee Benefit Expenses 457.37 455.7 412.13 0.4% 11.0%
    Other Expenses 1,153.96 1135.9 1,141.72 1.6% 1.1%
    EBITDA 1443 1542 1318 -6.4% 9.5%
    Finance Cost 23 27 29.9 -16.2% -24.2%
    Depreciation 205.11 207.91 213.35 -1.3% -3.9%
    Profit before exceptional Item and Tax 1296 1378 1150 -6.0% 12.7%
    Share in profit of associates 8.93 14.96 5.85 -40.3% 52.6%
    Exceptional Item 115.7
    Tax 315.13 362.43 286.42 -13.1% 10.0%
    Profit After Tax 874 1031 870 -15.2% 0.5%
    EBITDA Margin 18.3% 18.1% 19.8% 21 bps (153) bps
    PAT Margin 11.07% 12.09% 13.07% (102) bps (200) bps
    Segment Revenue Q3FY22 Q3FY22 Q3FY21 QoQ %      YoY%
    Paints 7,663.74 8319.4 6,467.20 -7.9% 18.5%
    Home Improvement 232.36 209.3 185.88 11.0% 25.0%

    Result Highlight: 

    • Consolidated Revenue of Asian Paints for Q4FY22 grew 18.7% YoY at Rs 7893 Crore beats the street estimates of Rs 7785 Crore. EBITDA up 9.5% YoY at Rs. 1443 Crore.

    • Sequentially Revenue and EBITDA fell 7.4% and 6.4% respectively.

    • Net profit down 15.2% QoQ and remained flat YoY to Rs 874 crore due to higher cost of Goods sold and exceptional item of Rs. 115.7 Crore in Q4FY22.

    • Exceptional items includes the following items:-

    • An amount of Rs. 73 crores computed under ‘expected credit loss’ method is recognized as an exceptional item towards subsidy receivable for earlier years.

    • Economic crisis in Sri Lanka has led to currency devaluation. This has resulted in recognition of an expense of Rs. 48.50 crores towards exchange loss arising on foreign currency obligations of Causeway Paints Lanka.

    • Impairment loss of Rs. 13.47 crores on assessment of the fair value of investment made in Causeway Paints.

    • EBITDA margin improved sequentially to 18.3% in Q4FY22 on calibrated price hikes of 15%

    • The domestic Decorative business grew strongly, registering 8% volume growth and 20% plus revenue growth on a high base.

    • The Board of Directors has recommended a final dividend of Rs. 15.50 per equity share (1550%).

     Management commentary: Amit Syngle, Managing Director &CEO 

    • The domestic Decorative business grew strongly, registering 8% volume growth and 20% plus revenue growth on a high base.

    • The International Business managed to deliver a double-digit revenue growth for the quarter despite severe challenges in key markets.

    • The Industrial Coatings business closed the quarter with another round of robust double digit revenue growth with continued momentum in the Protective Coatings segment.

    • The scale-up in the Home Décor business continued unhindered, making further inroads through network expansion and introduction of unique value propositions for its customers.

    • We continued to improve operating margins on a sequential basis which was a result of some calibrated price increases, driving the premium and luxury product growths, coupled with some strong work on driving operational efficiencies across businesses.

     Outlook:

    Asian Paint reported volume growth of 8% in Q4FY22 on higher base of 48% in same quarter last year as business recovered from Pandemic. Margins are improved sequentially with multiple price hikes taken by the company during the quarter. The company continues to expand its categories from paints to overall home decoration segments which would help it to create new growth levers for future growth.

    Disclosure in pursuance of Section 19 of SEBI (RA) Regulation 2014

    Elite Wealth Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.
    For analyst certification and other important disclosures, see the Disclosure Appendix, or go to www.elitewealth.in. Analysts employed by Elite Wealth Limited are registered/qualified as research analysts with SEBI in India.( SEBI Registration No.: INH100002300)
    Disclosure Appendix
    Analyst Certification (For Reports)
    Israil Khan, Elite Wealth Limited, suhail@elitewealth.in
    The analyst(s) certify that all of the views expressed in this report accurately reflect my/our personal views about the subject company or companies and its or their securities. I/We also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Elite Wealth Limited.
    As to each individual report referenced herein, the primary research analyst(s) named within the report individually certify, with respect to each security or issuer that the analyst covered in the report, that:
    (1) all of the views expressed in the report accurately reflect his or her personal views about any and all of the subject securities or issuers; and
    (2) no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in the report.
    For individual analyst certifications, please refer to the disclosure section at the end of the attached individual notes.
    Research Excerpts
    This note may include excerpts from previously published research. For access to the full reports, including analyst certification and important disclosures, investment thesis, valuation methodology, and risks to rating and price targets, please visit www.elitewealth.in.
    Company-Specific Disclosures
    Important disclosures, including price charts, are available and all Elite Wealth Limited covered companies by visiting https://www.elitewealth.in, or emailing research@elitestock.com with your request. Elite Wealth Limited may screen companies based on Strategy, Technical, and Quantitative Research. For important disclosures for these companies, please e-mail research@elitestock.com.
    Options related research:
    If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the risk disclosure documents, please contact your Broker’s Representative or visit the OCC’s website at https://www.elitewealth.in
    Other Disclosures
    All research reports made available to clients are simultaneously available on our client websites. Not all research content is redistributed, e-mailed or made available to third-party aggregators. For all research reports available on a particular stock, please contact your respective broker’s sales person.
    Ownership and material conflicts of interest Disclosure
    Elite Wealth Limited policy prohibits its analysts, professionals reporting to analysts from owning securities of any company in the analyst’s area of coverage. Analyst compensation: Analysts are salary based permanent employees of Elite Wealth Limited. Analyst as officer or director: Elite Wealth Limited policy prohibits its analysts, persons reporting to analysts from serving as an officer, director, board member or employee of any company in the analyst’s area of coverage.
    Country Specific Disclosures
    India – For private circulation only, not for sale.
    Legal Entities Disclosures
    Mr. Ravinder Parkash Seth is the Managing Director of Elite Wealth Ltd (EWL, henceforth), having its registered office at Casa Picasso, Golf Course Extension, Near Rajesh Pilot Chowk, Radha Swami, Sector-61, Gurgaon-122001 Haryana, is a SEBI registered Research Analyst and is regulated by Securities and Exchange Board of India. Telephone:011-43035555, Facsimile: 011-22795783 and Website: www.elitewealth.in
    EWL discloses all material information about itself including its business activity, disciplinary history, the terms and conditions on which it offers research report, details of associates and such other information as is necessary to take an investment decision, including the following:
    1. Reports
    a) EWL or his associate or his relative has no financial interest in the subject company and the nature of such financial interest;
    (b) EWL or its associates or relatives, have no actual/beneficial ownership of one per cent. or more in the securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance;
    (c) EWL or its associate or his relative, has no other material conflict of interest at the time of publication of the research report or at the time of public appearance;
    2. Compensation
    (a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
    (b) EWL or its associates have not managed or co-managed public offering of securities for the subject company in the past twelve months;
    (c) EWL or its associates have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
    (d) EWL or its associates have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
    (e) EWL or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report.
    3 In respect of Public Appearances
    (a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
    (b) The subject company is not now or never a client during twelve months preceding the date of distribution of the research report and the types of services provided by EWL