BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Asian Paints Ltd. reported flat volume YoY (our estimate: 5% growth) and weaker than-expected product mix in its Q3 FY23 results. Consequently, Ebitda/profit before tax/profit after tax missed our estimates by 10-11%.
Management indicated that after a weak October 2022, partly caused by high base, demand recovered YoY in Nov-22 before reaching double-digit sales growth in Dec-22.
Nevertheless, we expect near-term volume to be under pressure with Ebitda margin under check for the next two-three years because of potential competitive pressures and expanding capacity.
Asian Paints’ valuations are fair at 52.7 times FY24E and 46.4 times FY25E earnings per share.
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