Asian Paints - Colourful Q3! Strong Volume Growth Was A Surprise: Dolat Capital
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Dolat Capital Report
Asian Paints Ltd.’s Q3 FY21 revenues, EBITDA and APAT came ahead of our estimate as pent-up and festive demand was higher compared to our expectation. The company witnessed 33% volume growth during the quarter.
International Business posted 22.4% growth as Asia and ME posted strong double digit growth; Ethiopia, Bahrain and Indonesia were laggards.
Considering improvement in demand, we believe that the growth rate would remain high going ahead as well.
We believe that the volume growth in the decorative segment should remain high, especially in rural areas, given better crop production this season. Further, ongoing government investments in rural infrastructure, and house construction in rural areas should help acceleration. In the long term, we remain optimistic about the unorganised to organised shift in the paint industry. APL, being a leader in the category, is likely to benefit the most from the shift.
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