Asahi India Q4 Review - Operating Leverage, Product Mix Aid Margins: ICICI Securities
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ICICI Securities Report
Asahi India Glass Ltd.’s Q4 FY21 operating numbers were a beat on consensus estimates as revenue rose 36% YoY to Rs 8 billion while Ebitda margin came in at 22.7% (up 703 basis points YoY).
Faster growth in architectural segment (up 46% YoY) has led to superior mix (contribution rose to 42.4%/ up 300 basis points), thus aiding margins.
We remain positive on the stock due to-
1. strong proxy play for domestic passenger vehicle recovery coupled with headroom for content increase;
2. play on architectural segment demand growth on the back of improving housing demand and
3. leaner fixed-cost structure vis-a-vis competition (domestic/imports) aided by policy support (e.g. anti-dumping duty).
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