Asian Paints Maintains Its Sheen, Posts Strong Q3FY13 Numbers

Asian Paints announced its Q3FY13 results post market hours on Jan 21, 2013. The numbers have been robust and in line with our expectations. We had recommended Asian Paints in Dalal Street Investment Journal (Vol. 27, Issue No. 24, dated Nov 5-18, 2012), when it was trading at a price of Rs 3884 per share. Since our recommendation, the price has appreciated by 10.61% to Rs 4296 per share in all of 55 trading sessions, translating into an annualised return of 48.99%.

During the said period, its revenues grew by 18.93% YoY to Rs 3052.92 crore on a consolidated basis. Although there have been cost pressures on the company due to increasing raw material prices, it improved on the efficiency front. Its EBITDA grew by 25.99% to Rs 510.43 crore and the net profit went up by 30.51% to Rs 335.23 crore. Put up in margin movement, it recorded an improvement in its EBITDA margin and a net profit margin of 94 basis points and 91 basis points respectively.

In view of the resilience Asian Paints has been showing, and considering its position as the market leader and the potential that the Indian paint industry has to offer, we maintain our positive outlook on the company’s performance. Expect some hefty upward movement in the stock price of Asian Paints on tomorrow’s (Jan 22, 2013) opening.