Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<ul>
<li>There is a lot of excitement and uncertainty about the paint sector especially Asian Paints' leadership in the broader market and among analysts.</li>
<li>We interact with a couple of paint dealers across Delhi and Dimapur to gauge the sentiment on the ground.</li>
<li>While there is no denying that <a href="https://www.smartkarma.com/entities/grasim-industries-ltd" target="_blank" data-smartkarma-citation="entities:290:1" rel="noopener">Grasim Industries (GRASIM IN)</a> poses a credible threat it might be too early to write off the market leader <a href="https://www.smartkarma.com/entities/asian-paints-ltd" target="_blank" data-smartkarma-citation="entities:6354:1" rel="noopener">Asian Paints (APNT IN)</a>. </li>
</ul>


There is a lot of excitement and uncertainty about the paint sector especially Asian Paints' leadership in the broader market and among analysts.
We interact with a couple of paint dealers across Delhi and Dimapur to gauge the sentiment on the ground.
While there is no denying that Grasim Industries (GRASIM IN) poses a credible threat it might be too early to write off the market leader Asian Paints (APNT IN). 


External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Asian Paints’ Q3FY24 results were ahead of our estimates on the profitability front.</li><li>Its consolidated sales grew by 5.5% YoY to Rs 9,103 Cr (Volume grew 12% YoY) owing to the shift in the festive season.</li><li>Gross/EBITDA margins improved by 504/393bps YoY to 43.6%/22.6%, driven by deflation in key raw material prices (-0.2% material deflation in Q3FY24) and better product mix. Adj. PAT increased by 35% YoY to Rs 1,448 Cr.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Asian Paints’ Q3FY24 results were ahead of our estimates on the profitability front.Its consolidated sales grew by 5.5% YoY to Rs 9,103 Cr (Volume grew 12% YoY) owing to the shift in the festive season.Gross/EBITDA margins improved by 504/393bps YoY to 43.6%/22.6%, driven by deflation in key raw material prices (-0.2% material deflation in Q3FY24) and better product mix. Adj. PAT increased by 35% YoY to Rs 1,448 Cr.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Asian Paints - Competitive Intensity Will Define Future Course

<ul><li>Asian Paints Q2FY24 results were below our estimates. Consolidated sales were flat YoY to Rs 8,479 Cr (Volume grew 6% YoY) owing to weak consumer demand.</li><li>Gross/EBITDA margins improved by 764/573bps YoY to 43.4%/20.2%, driven by deflation in key raw material prices (4% material deflation in Q2FY24).</li><li>Adj. PAT increased by 54% YoY to Rs 1,205 Cr. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Asian Paints Q2FY24 results were below our estimates. Consolidated sales were flat YoY to Rs 8,479 Cr (Volume grew 6% YoY) owing to weak consumer demand.Gross/EBITDA margins improved by 764/573bps YoY to 43.4%/20.2%, driven by deflation in key raw material prices (4% material deflation in Q2FY24).Adj. PAT increased by 54% YoY to Rs 1,205 Cr. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Asian Paints - Missed Estimates; Maintain HOLD

<ul><li>Asian Paints Q1FY24 results were strong on all fronts, especially margins. Consolidated sales grew 7% YoY to Rs 9,182 Cr (marginally lower).</li><li>Volume grew 10% YoY (on a high base of 37% in Q1FY23), led by the economy, premium and waterproofing range, while the luxury segment saw muted performance.</li><li>Gross/EBITDA margins improved by 523/502bps YoY (up44/188bps QoQ) to 42.9%/23.1%, driven by deflation in key raw material prices (2% material deflation in Q1FY24). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Asian Paints Q1FY24 results were strong on all fronts, especially margins. Consolidated sales grew 7% YoY to Rs 9,182 Cr (marginally lower).Volume grew 10% YoY (on a high base of 37% in Q1FY23), led by the economy, premium and waterproofing range, while the luxury segment saw muted performance.Gross/EBITDA margins improved by 523/502bps YoY (up44/188bps QoQ) to 42.9%/23.1%, driven by deflation in key raw material prices (2% material deflation in Q1FY24). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Asian Paints - Limited Upside Potential; Downgrade to HOLD

<ul><li>Asian Paints Q4FY23 print was strong across all fronts, especially on the margins. Its consolidated revenue grew 11% YoY to Rs 8,787 Cr.</li><li>Volume grew by 16% YoY (~14% for FY23), led by the economy and waterproofing range, premium and luxury (grew double- digit) recovered after two-quarters of subdued performance.</li><li>Gross/EBITDA margins improved 380/293bps YoY (up 393/256 bps QoQ) to 42.5%/21.2% owing to deflation in key raw material prices (-4% material deflation in Q4FY23).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Asian Paints Q4FY23 print was strong across all fronts, especially on the margins. Its consolidated revenue grew 11% YoY to Rs 8,787 Cr.Volume grew by 16% YoY (~14% for FY23), led by the economy and waterproofing range, premium and luxury (grew double- digit) recovered after two-quarters of subdued performance.Gross/EBITDA margins improved 380/293bps YoY (up 393/256 bps QoQ) to 42.5%/21.2% owing to deflation in key raw material prices (-4% material deflation in Q4FY23).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Asian Paints - Robust Operating Performance; Maintain BUY

India

Asian Paints Limited manufactures a wide range of decorative paints, varnishes, enamels, and black & synthetic resins. The Company, through its subsidiaries, also manufactures specialty industrial chemicals and vinyl pyridine latex products which are used in the manufacture of rubber tires.

Asian Paints (APNT IN)