Akzo Nobel Q1 Review- Outperformer; Turnaround Momentum Under Rajiv's Leadership Accelerates: ICICI Securities

ICICI Securities Report

Akzo Nobel India Ltd. delivered yet another strong (versus peers) print with likely market share gains and double-digit volume growth across segments (YoY revenue growth - Akzo: +3.7%, Asian Paints: -2.3%, Kansai: -1.1%). We note

1. there is likely superior revenue mix in decorative paints considering the expansion in gross margins. We believe super-premium paints have performed well. Akzo has also entered uber-luxury interior emulsion under the brand Dulux Velvet Touch Eterna.

2. It is now offering 10% additional volumes on Dulux Promise range (applicable on 20-liter SKUs).

3. Akzo has increased investments in B2B segments and we believe the benefits of these efforts are visible with these segments contributing handsomely to the overall growth.

4. We also like the strategy to drive sourcing efficiencies and cost-saving initiatives to invest more in brand-building activities as we consider it to result in sustainable market share gains.

Move rating a notch to 'Add' from 'Hold'.

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