Asian Paints is expected to report strong margin expansion in the September quarter results, although the delayed festive season may see demand shift to the third quarter. The volume growth is expected to be higher than the value growth due to the prices of raw materials cooling off. The Street expects Asian Paints' domestic volume growth to be 7-9%.
| Quarter | Volume Growth |
| Q4FY22 | 8% |
| Q1FY23 | 37% |
| Q2FY23 | 11% |
| Q3FY23 | 0% |
| Q4FY23 | 16% |
| Q1FY24 | 10% |
| Q2FY24e | 7-9% |
Asian Paints Volume Growth Trends
India's leading paint manufacturer is expected to report a revenue of ₹8,900 crore for the quarter under review, up 5.2% against ₹8,457.6 crore in the year-ago period. According to a poll by CNBC-TV18, the company's earnings before interest, taxes, depreciation, and amortisation — an indicator of a firm's operating performance — is likely to jump 47.5% year-on-year to ₹1,800 crore against ₹1219.3 crore.
Asian Paints' margin is expected at 20.2% against 14.4% in the year-ago period. The company's profit after tax is seen rising 53% to ₹1,230 crore vs ₹803.8 crore. According to analysts, a 500 basis points gross margin expansion is expected, and the company is likely to put back gross margin savings into ad spends.
Price/mix is expected to have witnessed a 2-3% decline in the quarter as the economy and waterproofing segments grow. According to analysts, the impact of patchy rainfall on demand will be an important factor to track. Home Décor is expected to have picked up in the period under review.
After the first quarter results, the management said that it would increase ad spending in the next two quarters. The company had stated that it wouldn’t rule out price cuts if the RM situation became more favorable. Asian Paints management had expected robust festive sales and was targeting double-digit volumes in the financial year 2024.
(Edited by : Ajay Vaishnav)
First Published: Oct 26, 2023 8:01 AM IST
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