Asian Paints Q2 Results Review - Didn't Disappoint In Disappointing: ICICI Securities

NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.While Asian Paints Ltd. reported weak Q2 FY25, some of the startling aspects were-Volumes declined 0.5% in-spite of price cuts of ~4% and higher trade spends. We note volumes declined for the first time in past 12 years (Ex- Q1FY21 Covid impact), Asian Paints has lost market shares to incumbents such as Akzo, Indigo and Berger. The loss of shares to new players is yet to play out materially.Ebitda margin came in at 15.6% materially below the guided range of 18%- 20%. While it may recover in H2 FY25 on ~2.5% price hike in Q2, we believe losses in putty business may cap the margin recovery in medium term and there is impairment in value of Weatherseal and White Teak with revision in business plans. .As most new businesses remain in investment mode, there are reasonable questions on value creation potential of these businesses. We cut FY25-26E earnings by ~10%. Reduce.We reckon [comfortable] competitive equilibrium in paints is likely broken. Retain underweight on large cap paints. Contrarian investors may consider owning Akzo Nobel/Indigo Paints/Kansai Nerolac..Click on the attachment to read the full report:.Kansai Nerolac Q2 Review - Weak Market Forces, Investments In Trade Weigh On Profitability: ICICI Securities.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Asian Paints Q2 Results Review - Didn't Disappoint In Disappointing: ICICI Securities

The brokerage believes the company could post YoY earnings decline in FY25 after a gap of almost 17 years.

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Asian Paints Q2 Results Review - Didn't Disappoint In Disappointing: ICICI Securities

The brokerage believes the company could post YoY earnings decline in FY25 after a gap of almost 17 years.

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