- 27 Jul 2022
- ICICIdirect Research
Asian Paints posted its Q1FY23 NumbersASIANPAINT - 2840 Change: 0.75 (0.03 %)
News: Asian paints' consolidated revenue grew by 54% YoY to Rs 8607 crore, supported by robust volume growth (up 37% YoY) in Q1FY23. Despite a lower gross margin (down 73 bps YoY), the EBITDA margin increased by 172 bps YoY to 18.1% due to improved operating leverage. Finally, PAT increased by 84% YoY to Rs 1054 crore, tracking higher sales and EBITDA margin expansion.
Views: Despite sharp price hike of ~22-25% YoY, Asian Paints has reported a strong decorative volume growth in Q1FY23. On a three-year basis, Paints revenue grew at a CAGR of ~20%, supported by volume growth of 18%. We believe that the strong decorative volume growth of Asian paints would have been driven by its robust dealer network (70,000+), strong supply chain, and small-player market share gains. On the margin front, the company has also reported a significant improvement in EBITDA margin, which is supported by price increases and enhanced operating leverage.