0

0

0

0

0

0

0

0

0

earnings | IST

Asian Paints Q1 earnings: Elections, weak consumer sentiment to affect results

Asian Paints is set to report its Q1 results today. Here are key expectations.

Asian Paints is expected to report muted quarterly results on Wednesday due to subdued consumer sentiment amid elections. On the revenue, the company is likely to see 10.5 percent growth at around Rs 4,850 crore for the June 2019 quarter. The margins are expected to come down year-on-year (YoY) by about 140 basis points (bps) because the EBITDA is likely to grow just by about 3 percent, close to around Rs 900 crore for the Q1FY20.
Asian Paint's net profit, on a reported basis, may see an optical contraction of 4.5 percent primarily over lower EBITDA growth than the revenue growth. Also, the base quarter had a share of profit from associates to the tune of around 11-11.5 percent.
The key number to watch out for would be the volume growth. The Street is working with volume growth of around 7-8 percent this time around. For 10.5 percent revenue growth, 7-8 percent volume growth means realisations grow around just 3-4 percent and this despite the fact that the company has taken a price hike of around 7.5 percent over the last one year. Primarily because the lower end products would do much better.
Sequential movement of EBITDA will also be watched out for because crude from the previous quarter is off the highs.
Key things to watch out for:
-Elections and weak consumer sentiment to affect performance
-New capacity to aid volumes
-Lower crude to support gross margins
-Revenue seen (GU) 10.5 percent at Rs 4,850 crore vs Rs 4,390.3 crore
-EBITDA seen (GU) 3 percent at Rs 900 crore vs Rs 874.4 crore
-Margins seen (RD) at 18.6 percent vs 19.9 percent
-Profit after tax seen (RD) 4.5 percent at Rs 545 crore vs Rs 571.3 crore
-Domestic volume growth seen between 7-8 percent