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- 09 May 2025
- ICICIdirect Research
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ASIAN PAINTS CONSOLIDATED REVENUES DECREASED BY 4 PERCENT YOY TO RS8359 CRORE
ASIANPAINT - 2325 Change: -31.80 (-1.35 %)News: Asian Paints (consolidated) revenues decreased by 4.3%yoy to Rs8,358.9crore, below than our expectation of Rs8,768.2crore and street expectation of Rs8,598.6crore. Decorative paint business registered a volume growth of 1.8% (vs. expectation of 4-5%) while revenues were down by 4.4% due to downtrading to low price products. Industrial business grew by 6.1% in Q4FY25.Home Décor business (including Kitchen, bath, windshield and White Teak) registered decline of 16%yoy to Rs213crore. International business stood flat at Rs810crore. Consolidated gross margins slightly improved by 22bps yoy 43.9%. lower operating leverage and higher marketing expenses led to 219bps yoy to 17.2% (down sequentially by 197bps QoQ) in-line with our expectation of 17.4% lower than street expectation of 18.0%. EBIDTA decreased by 15%yoy to Rs1,436.1crore. This along with higher depreciation charges led to 35% decline in the adjusted PAT to Rs818crore lower than our expectation of Rs1076.1crore and street expectation of Rs1,081.6crore.
View: Asian Paint registered yet another quarter of weak performance with low single digit growth in the decorative paints business volume and EBIDTA margins coming in lower at 17%. Slowdown in the urban India, muted real estate demand and higher competitive pressure affected the growth and profitability during the quarter. Management expects gradual recovery in the sales volume with expected recovery in the urban demand on back of decline in the inflation and tax cuts, increase in the industrial capex and better rural demand due expected better monsoon. Management expects high single digit revenue growth in FY26. EBIDTA margins will continue to remain at lower band of 18-20% due to increase in competition in the decorative segment. We expect earnings growth momentum to remain muted in the near term unless there is material improvement in the volume growth. This will continue to weigh the stock valuations in the near term.
Impact: Negative