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News: Asian Paints' consolidated revenue grew ~11% YoY to ~Rs 8787 crore led by ~16% YoY volume growth. Gross margin improved 379 bps YoY supported by easing raw material prices. As a result, EBITDA margin improved 293 bps YoY to 21.2% tracking better operating leverage. PAT came in at Rs 1258.4 crore, up 44% YoY led by improvement in margin profile. PAT includes one-time exceptional loss of Rs 24 crore pertaining to recognition of an expense towards foreign exchange loss arising from Causeway Paints Lanka (Pvt Ltd) The company has announced total dividend of Rs 25.65/share for FY23 (payout ratio: 60%).
Views: We believe Asian Paints reported a strong performance in Q4FY23 led by double digit volume growth. Even on the margin front, a sequential recovery in margin is encouraging. The exit EBITDA margin at ~21% is almost near its peak level margin clocked in FY22. This was largely driven by benign raw material prices and better operating leverage. For FY23, revenue came in higher by ~19% YoY to | 34488 crore supported by ~14% volume growth YoY (three year CAGR: 19%) led by strong demand for decorative paints. Asian Paints was able to benefit from declining raw material prices, which led to expansion of margins.
Impact: Positive