
KR Choksey’s analysis report on Asian Paints
For Q3FY24, APNT reported income of INR 91,031 Mn, a progress of 5.4% YoY/ 7.4% QoQ. Income was in step with our estimate. For 9MFY24, income grew by 4.1% YoY to INR 2,67,640 Mn. Q3FY24 progress was supported by the prolonged festive season, nonetheless there was some relative moderation in demand within the latter a part of the quarter. APNT noticed some restoration within the rural markets. Gross margin expanded by 504 bps YoY/ 24 bps QoQ within the quarter as uncooked materials costs noticed additional deflation of 0.2% QoQ. The gross margins inched up regardless of a 1.3% worth lower taken within the portfolio. In 9MFY24, the gross margin expanded by 595 bps YoY. EBITDA for the quarter grew by 27.6% YoY/ 19.8% QoQ to INR 20,561 Mn and was 3.1% increased than our estimate attributable to decrease worker and different bills. EBITDA margin expanded by 393 bps YoY/ 234 bps QoQ to 22.6%. EBITDA margin enlargement was pushed by materials value softening, progress in luxurious merchandise, and working, sourcing and formulation efficiencies. For 9MFY24, EBITDA grew by 34.1% YoY to INR 58,936 Mn whereas EBITDA margin expanded by 492 bps YoY to 22.0%. PAT for the quarter was at INR 14,477 Mn, reporting a progress of 35.0% YoY/ 20.1% QoQ. PAT was 2.7% increased than our estimate, flowing down from the upper EBITDA. PAT for 9MFY24 grew by 46.3% YoY to INR 42,035 Mn. Whereas there have been no distinctive gadgets for the quarter or comparable quarters, on a 9MFY24 foundation, progress in Adj. PAT was 45.1% YoY.
Outlook
We make small changes to our FY24E/ FY25E EPS of +1.1%/ -1.3% respectively, as we issue within the robust margin efficiency in Q3FY24 however scale back our income assumption barely. We introduce our FY26E estimates. We count on Income/ EBITDA/ Adj. PAT to develop at 10.0%/ 14.6%/ 15.4% CAGR, respectively, between FY23-26E. The share at present trades at 54.4x/ 52.4x/ 47.5x FY24E/ FY25E/ FY26E Adj. EPS, respectively. Since our final report, the share worth has elevated by 5.6%. We roll over our valuation to FY26E and apply a P/E a number of of 52x (earlier 55x on FY25E EPS) on FY26E EPS of INR 66.5 to reach at a goal worth of INR 3,460 (INR 3,365 earlier); an upside potential of 9.4%. Accordingly, we keep our “ACCUMULATE” score on the shares of Asian Paints Ltd.
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Asian Paints – 19012024 – kr