In past one month, the stock of India’s leading and Asia’s third largest paint company has outperformed the market by gaining 17% as compared to 3% rise in the S&P BSE Sensex.
Motilal Oswal Securities expects the company to report 32.8% year-on-year (YoY) growth in net profit at Rs 5.82 billion in Q1FY19.
“We expect revenue to grow 22% YoY to Rs 46.5 billion in Q1FY19, with 16% volume growth in the domestic decorative business. Operating margin is likely to expand by 150 bps to 18.9% with EBITDA growing 32.5% YoY during the quarter,” the brokerage firm said in result preview note.
"Asian Paints is likely to record sales growth of around 15% YoY to around Rs 43.88 billion in Q1FY19 mainly due to around 12% YoY volume growth. Higher volume growth would be largely on account of lower base (GST related de-stocking of inventory). The company has taken a price hike at different intervals (around 3% YoY) mainly to offset higher raw material prices. As a result, the EBITDA margin is likely to increase 66 bps YoY to 18%. Higher sales growth and expansion in EBITDA margin may result in PAT growth of 12% YoY to Rs 4.95 billion," ICICI Securities said in a report.