Motilal Oswal: Asian Paints’ Recovery Sharper Than Expected In Q1, Commentary Healthy   
An employee places a lid on a tin of ready mixed blue paint inside a paints and coatings factory. (Photographer Jasper Juinen/Bloomberg)

Motilal Oswal: Asian Paints’ Recovery Sharper Than Expected In Q1, Commentary Healthy   

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

While Asian Paints Ltd. reported sharp YoY declines of 42.7%, 58.2%, and 67.4% in sales, Ebitda, and profit after tax, respectively, the numbers were still better than expected given the double-digit volume growth witnessed in June 2020. Importantly, commentary on recovery sustaining is also reasonably strong.

Despite healthy volume growth, earnings growth has been weak for several years now, which is likely to continue going ahead. Nevertheless, the likelihood of sharp earnings decline, as feared earlier, may not materialise.

Therefore, it is possible that Asian Paints, unlike other discretionary peers, would emerge relatively unscathed from the Covid-19 crisis. With better than expected recovery, Asian Paints continues to remain market leader in a category with attractive long-term potential.

Click on the attachment to read the full report:

Motilal Oswal - Asian Paints Q1FY21 Result Review.pdf

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