Asian Paints: Q1FY15 Result Analysis
DSIJ Intelligence / 22 Jul 2014
Asian Paints announced its June 2014 quarter results where the company has posted a good growth in topline as well as bottomline. When we look at standalone results, the results may not look good. However consolidated financial performance is better than the street estimates.
To put the figures in perspective, on consolidated basis for June 2014 quarter, Asian Paints posted a topline of Rs 3362.24 crore as against Rs 2841.11 crore posted in June 2013 quarter. PBIT for the June 2014 quarter stood at Rs 491.96 crore as against Rs 404.78 crore in June 2013. The company’s performance has been good on sequential basis also. For March 2014 the company has posted a topline of Rs 3307.13 crore and Rs 422.96 crore of PBIT.
On the margins front, there was marginal improvement in June 2014 quarter. PBIT margins reached levels of 14.72% as against 14.25% in June 2013 and 12.79% in March 2014.
On the bottomline front, the consolidated bottomline for June 2014 quarter stood at Rs 338.70 crore as against Rs 275.20 crore posted in June 2013. Net margins for the quarter stood at 10.1 %, which is a marked improvement from the levels of 9.70% posted in June 2013. However adjusted for extraordinary items, the net margins for June 2014 quarter declines to 9.3%. We feel the company is still witnessing margin pressure.
Commenting on the results K.B.S. Anand, Managing Director & CEO, Asian Paints stated “The Decorative business registered double digit growth during the quarter with good growth across geographies. The Automotive coatings JV (PPG-AP), saw good growth in the General Industrial segment and Refinish segments while the Automotive segment demand was subdued. The Industrial Coatings JV (AP-PPG), which had seen a decline in the previous year, saw good volume growth in the Industrial Liquid Paints and Road Marking business. Performances of the International units were a mixed bag with units in Caribbean, UAE, Singapore and Bangladesh doing well. Operations in Egypt were affected due to weak business sentiment in the country”.
We are of the opinion that the results are in line with street estimates. We expect the counter to witness a positive move on the bourses.
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