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Asian Paints Q4FY25 – weak performance; cautious outlook for FY26


Asian Paints (consolidated) revenues declined 4.3% yoy to Rs 8,359crore, below than ours and street expectation. Decorative paint business registered a volume growth of 1.8% (vs. expectation of 4-5%) due to downtrading to low price products.
Lower operating leverage and higher marketing expenses led to 219 bps yoy in EBDITA margin to 17.2% (down sequentially by 197bps QoQ), also lower than street expectation of 18.0%.
The management has guided for high single digit revenue growth with gradual recovery in the volume growth. We expect large part volume recovery should happen in the second half of the year prior to festive season with improvement in the urban demand, recovery in the repainting and industrial activities and steady demand in the rural markets. EBIDTA margins will continue to remain at lower band of 18-20% as large focus will be on recovery in the volume growth.
We expect earnings growth momentum to remain muted We suggest avoiding buying this stock
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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