Asahi India - Growth, Mix Surprise Aids Margin Improvement In Q3: ICICI Securities
A worker fits window glass to an automobile door on the production line. (Photographer: Bartek Sadowski/Bloomberg)

Asahi India - Growth, Mix Surprise Aids Margin Improvement In Q3: ICICI Securities

BQ Blue’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 BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Asahi India Glass Ltd.’s Q3 FY21 operating numbers were a beat as Ebitda margins came in at 24% (up 640 basis points YoY), while revenues rose 9.3% YoY to Rs 7.4 billion.

The margin beat was driven by improvement of gross margins/lower fixed costs (both ~160 bps) coupled with lower power and fuel costs (~300 bps).

We remain positive on the stock due to -

  1. strong recovery in auto segment expected in FY22 (expect 15-20% original equipment manufacturer volume growth);
  2. continued growth momentum in architectural segment for domestic players on the back of improving housing demand and increased curbs on imports;
  3. leaner fixed-cost structure aided by structural measures and
  4. lower gas costs.

Click on the attachment to read the full report:

ICICI Securities Asahi Q3FY21 Results Update.pdf

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