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Asian Paints Q1 Review - Pent-Up April, June Demand Fuels Performance: Centrum Broking

Asian Paints Q1 Review - Pent-Up April, June Demand Fuels Performance: Centrum Broking

Paint used to color zipper sliders sits on a table during production. (Photographer: Meg Roussos/Bloomberg)
Paint used to color zipper sliders sits on a table during production. (Photographer: Meg Roussos/Bloomberg)

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.

Centrum Broking Report

Asian Paints Ltd.’s Q1 FY22 numbers beat our estimates.

Consolidated revenue/Ebitda/profit after tax grew 91.1%/88.7%/158% (two year compound annual growth rate: 4.6%/down 11.2%/down 7.0%), driven by 106% volume growth in the domestic decorative segment.

The management stated that the metros and tier-I/tier-II towns fueled growth better than rural markets; international business grew 50% plus.

Gross margin shrank 631 basis point to 38.4% owing to higher input prices, despite better product mix.

Asian Paints did some unique work on sourcing and formulation efficiencies, and took ~3% price hike in Q1.

Yet, Ebitda margin shrank 21bp to 16.4%.

Click on the attachment to read the full report:

Centrum Asian Paints - Q1FY22 Result Update .pdf

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