- 21 Jan 2022
- ICICIdirect Research
Asian Paints reports strong volume growthASIANPAINT - 3225 Change: 12.05 (0.38 %)
News: Asian Paints reported strong consolidated revenue growth of ~26% YoY to ~Rs.8527 crore (vs. I-direct estimate of ~Rs.7784 crore) despite a higher base of last year. The company reported volume growth of 18% in Q3FY22 better than our estimate of 8%. EBITDA margin declined by 825 bps YoY to 18% due to higher input prices. As a result, PAT at Rs.1025.5 crore came in better than estimate.
Views: We believe strong volume growth and a sequential recovery in the EBITDA margin were key positives for Asian Paints' Q3FY22 result. The aggressive price hikes taken by the company was to offset raw material cost pressure. We believe the full impact of price hikes will be visible on EBITDA margin from Q4FY22 onwards. We remain positive on Asian Paints as the company is the market leader in the decorative paint segment and it is one of the biggest beneficiary of shortening of repainting cycle and revival in the real estate industry.