Asian Paints Q2 preview: Profit may fall on weak domestic business; shares down over 2%
Even though margins at the paints company is likely to take a hit, price increases will offer some support to the company.
Asian Paints- the country's leading paints manufacturer is slated to reveal its Q2 earnings on Saturday (November 9). Zee Business research estimates the company to post muted results amid a slowdown in demand during the review period.
Consolidate net profit or Profit after tax (PAT) at the paints major is expected to decline 13 per cent on-year to Rs 1,051 crore versus Rs 1,205 crore during the same quarter of the previous year.
Revenue at the company is also seen dropping marginally as per estimates by a tad 0.3 per cent to Rs 8,455 crore during the Q2 period, in comparison to Rs 8,479 crore reported during the same period last year.
At the operational level, EBITDA or earnings before interest, taxes and amortisation will also fall year-on-year (YoY) by as much as 12 per cent to Rs 1,514 crore. The same stood at Rs 1,716 crore in the same period last year. Similarly, margin will see a drag and inch lower by 2.3 per cent or 230 basis points.
Analysts expect 6-7 per cent during the quarter despite the festive mood which spurs demand in the wake of customer's inclination to renovate their homes.
The company's domestic business is also estimated to log 1 per cent degrowth during the September quarter of the current fiscal year.
Asian Paints Q2 margins to remain weak
The company's margin during the review quarter may take a hit on the back of weak mix as well as raw material inflation. Nevertheless, an increase in product prices will offer some respite on the front.
Key monitorables
The company's management commentary on demand as well as raw material prices will remain crucial.
Asian Paints stock price performance
Ahead of its results tomorrow, shares of the company traded weak by over 2 per cent a Rs 2,779.75 per share, while in the last one-year the stock has tumbled over 8 per cent.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Senior Citizen Latest FD Rates: Know what major banks like SBI, PNB, Canara Bank, HDFC Bank, ICICI Bank are providing on fixed deposits
Gratuity Calculator: Rs 38,000 as last-drawn basic salary, 5 years and 5 months of service; what will be gratuity amount?
Top 5 Small Cap Mutual Funds with best SIP returns in 1 year: See how Rs 25,000 monthly investment has grown in each scheme
Top 7 SBI Mutual Funds With Best SIP Returns in 1 Year: Rs 25,000 monthly SIP investment in No.1 fund has jumped to Rs 3,58,404
02:35 PM IST