Asian Paints Q3 Results 2023 Preview: Despite muted volume, net profit likely to jump 10% YoY on price hikes

Asian Paints Q3 Results 2023: Asian Paints is expected to post a net profit of Rs 1,130 crore for the quarter ended 31 December 2022 which is a 10 per cent year-on-year jump from Rs 1,031 reported in the corresponding quarter in the year ago period according to Zee Business’ estimates. The consolidated revenue is estimated at Rs 9,297crore which is 9 per cent higher from Rs 8,527 crore posted in Q3FY22.

 EBITDA is seen at Rs 1,687 crore for the reporting quarter versus Rs 1,543 crore inQ3FY22, up 9 per cent. At 18 per cent, December 2022 quarter margins are likely to be on par with December 2021 quarter.

The company will announce its October-December quarter results on 19 December 2023, Thursday.

The overall volume growth is likely to remain muted. The base for domestic decorative paints remains high. Visibility in value growth will be seen on price hikes.

High inflation is likely to have dented the demand situation during the quarter.

The gross margins are expected to see an improvement as raw material costs subside. This in-turn will result in a flat EBITDA margins.

Investors willing to take positions in this stock must keep an eye on the management commentary on rural demand, margins recovery, A&P spends.

The stock trades at a 54X FY24E.

The stock today ended at Rs 2,918, up by Rs 8.85 or 0.30 per cent from the Friday closing price.

The stock has underperformed the Nifty50 by over 11 per cent giving negative 13 per cent returns versus 2 per cent returned by the broader markets according to data sourced from Trendlyne.  

The stock is trading at a Price to Book value of 19.

Indian equity benchmarks Sensex and Nifty50 reversed initial gains in a volatile session on Monday. Weakness in private sector financial stocks weighed on headline indices, though strength in IT shares lent some support. 

The Sensex lost 168.2 points or 0.3 per cent for the day to close at 60,093, having retreated 493.8 points from the strongest level in intraday trade. The Nifty50 settled at 17,894.9, down 61.8 points or 0.3 per cent.