Result Analysis: Asian Paints Ltd. (CMP:Rs.2868) Result Update: Q3FY23

Asian Paints Ltd. is the market leader in the paints sector in India with 80 years’ experience with presence in 15 countries across the world. The company manufactures a range of decorative and industrial paints. It also offers wall coverings, water proofing, adhesives and other services under its product portfolio. Company has started new range of hand, Surface and space sanitizers and disinfectants and also recently launched range of Furniture, Furnishings and Lighting Products under ‘Home Décor’ category.


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    Stock Details
    Market Cap. (Cr.) 282565
    Face Value 95.92
    Equity (Cr.) 1
    52 Wk. high/low 3590 / 2560
    BSE Code 500820
    Book Value (Rs) 147.03 
    Sector Paints


    Key Ratios
    Debt-equity: 0.1
    ROCE (%): 28.8
    ROE (%): 23.18
    TTM EPS: 39.26
    P/BV: 20.0
    TTM P/E: 75.03

    Financial Performance:

    Result Highlights:

    • Revenue of Asian Paints has grown marginally on both QoQ and YoY basis by 2.1%, and 1.72% respectively to Rs.8607.5 cr. in Q3FY23. Company has clocked PAT of Rs.1097.06 cr. in the Dec. quarter, growth of 36.48% QoQ and 6.38% YoY.

    • EBITDA margins of the company has increased sequentially by 404bps and showed a sluggish growth of 66bps on YoY basis to 19.73%.

    • The company added ~10000 new retail points in 9M; enhancing its Rurban distribution reach.

    • Company’s 9M FY23 Consolidated Sales increased by 21.8 % to ₹ 25,616.98 crores from ₹ 21,033.53 crores. Whereas Net profit after minority interest increased by 31.7 % to ₹ 2,872.31 crores from ₹ 2,180.15 crores

    • International business’ Sales increased by 2.1% in Q3 FY’23 to ₹ 778.82 crores from ₹ 762.43 crores. In cc terms, sales increased by 13.4%. PBT was ₹ 36.96 crores in Q3 FY’23 as against ₹ 11.29 crores last year

    • All businesses of the company be it home décor or international business (excluding both the Industrial business) registered flat value growth.

    • Industrial business of APPPG showed a Sales growth of 23.9% in Q3 FY’23 to ₹ 261.63 crores from ₹ 211.17 crores. PBT was ₹ 25.60 crores in Q3 FY’23 as against ₹ 12.07 crores last year. PPGAP Sales also grew by 23.8% in Q3 FY’23 to ₹ 513.34 crores from ₹ 414.76 crores. PBT was ₹ 91.36 crores in Q3 FY’23 as against ₹ 40.42 crores last year.


    Financial- Performance-asian

    Shareholding Pattern:

    Particulars %
    Promoters & Promoter Group 52.63
    FIIs 19.83
    DIIs 8.78
    Public 13.25
    Others 5.51

    Managerial commentary:

    Amit Syngle, MD & CEO of Asian Paints Limited said, “The domestic Decorative Business registered a flat volume and value sales delivery for the quarter, on a very high price increase base in the previous year. The extended monsoon in October also affected retailing in the peak festival season; but demand picked up in November and December leading to a double-digit growth for the Decorative Business in December. The operating margins improved strongly on sequential basis as well as saw an improvement on a y-o-y basis driven by deflation in some of the raw material prices as well as continued work on driving operational efficiencies across businesses.

    The Industrial Business did well led by strong growth in the Auto OE and General Industrial segments. The International Business was a mixed bag with good growth in the Middle East and Africa while the South Asia market, especially Sri Lanka and Bangladesh, got severely impacted by the adverse forex & macro-economic conditions. The Home Décor market continued its expansion foray but witnessed some slowdown in the Bath and the Kitchen business this quarter.”


    Asian Paints has reported overall tepid performance in the December’23 quarter with stagnated growth of 1.72% in Revenue and 6.38% growth in PAT compared to December’22 quarter. Extended monsoon & shorter Diwali season coupled with a high-volume base impacted overall growth in Q3’23, especially in North, Central & West markets. Going forward demand conditions are looking better, recent downturn in inflation as well as the strong recovery seen with double digit volume and value growth in Dec’22. B2B projects business will continue its growth trajectory with support from demand in Housing, Construction,

    Auto and Industrial sectors, the company is making further investments to fortify its Leadership Position in the market. The company reported EPS of Rs.29.95 for 9MFY23, and we expect the company to clock in the EPS for FY23 at Rs.39.93 at the PE of 71.82x for the CMP of Rs.2868.


    Particulars (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22 QoQ % YoY%
    Revenue from Operations 8607.5 8,430.60 8,462.15 2.10% 1.72%
    Other Operating Income 29.24 26.97 65.09 8.42% -55.08%
    Other Income 86.56 95.47 71.81 -9.33% 20.54%
    Total Income 8723.3 8553.04 8599.05 1.99% 1.44%
    Costs of Materials 3815.92 4,925.02 4,084.51 -22.52% -6.58%
    Purchase of stock-in trade 1031.54 1,155.94 927.25 -10.76% 11.25%
    Change in inventory 458.29 -645.33 381.58 -171.02% 20.10%
    Employee expense 503.81 512.63 455.73 -1.72% 10.55%
    Other Expense 1215.75 1,281.61 1,135.86 -5.14% 7.03%
    EBITDA 1697.99 1323.17 1614.12 28.33% 5.20%
    EBITDA Margin (%) 19.73% 15.69% 19.07% 404 bps 66 bps
    Finance Cost 41.39 35.4 27.45 16.92% 50.78%
    Depreciation & Amortisation expense 214.05 215.7 207.91 -0.76% 2.95%
    Share of profit in associates 35.65 22.09 14.96 61.39% 138.30%
    Profit Before Tax 1478.2 1094.16 1393.72 35.10% 6.06%
    Tax 381.14 290.33 362.43 31.28% 5.16%
    Profit After Tax 1097.06 803.83 1031.29 36.48% 6.38%
    PAT Margin (%) 12.75% 9.53% 12.19% 322 bps 56 bps
    EPS (in Rs.) 11.19 8.16 10.59 37.13% 5.67%
    Source: Company website, EWL Research

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