Asian Paints Q1 preview: Subdued show expected; gross margins to expand only marginally

Mumbai-headquartered leading paints manufacturer Asian Paints is all set to report its Q1FY25 earnings on July 17. Zee Business research desk expects the company to continue with its subdued performance in the April-June quarter with volume growth estimated at 8-10 per cent. The desk estimates standalone numbers to be soft for the company.

The consolidated net profit at the company is expected to log a 10 per cent decline in the reporting quarter on-year at Rs 1,411 crore as against Rs 1,575 crore reported in the same quarter last year.

The desk anticipates consolidated revenue to come in at Rs 9,096 crore, down 1 per cent, in comparison to Rs 9,182 crore reported in the corresponding period a year ago. 

EBITDA or Earnings Before Interest, Taxes, Depreciation and Amortisation for Q1FY25  is estimated at Rs 1,950 crore, down 8 per cent year-on-year (YoY) from Rs 2,121 crore in the same quarter in the year-ago period. The higher advertising spend will likely weigh on the company’s EBITDA profits.

Furthermore, gross margins are likely to expand only marginally in the June-ended quarter. In the previous quarter, the company’s gross margins improved by around 120 basis points.

Key monitorables

Investors will keep an eye on demand trends in the face of increasing competition in the industry.

Asian Paints share price performance

Ahead of its results tomorrow, the stock of Asian Paints traded higher by 1.79 per cent at Rs 3,009.45. Over a 1-year period, shares of Asian Paints have underperformed with a negative return of over 12 per cent.