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The company's Q3 net profit jumped 25.8 percent to Rs 463 crore from Rs 368 crore in corresponding quarter last fiscal. However, exceptional hit partially mitigated profit growth.
Operating profit (earnings before interest, tax, depreciation and amortisation) is likely to jump 21 percent year-on-year to Rs 708 crore and margin may expand 140 basis points to 17.4 percent during the quarter.
Led by pick up in decorative segment due to upcoming festive season, volume growth is seen at 9-10 percent. Analysts polled by CNBC-TV18 expect margins to expand again over benign input costs.
Abhijit Roy, MD & CEO of Berger Paints, says volume growth this quarter has been much higher than value growth.
Manyal says HUL‘s margins are likely to be steady around 17 percent as the company has passed on the benefits from lower raw material prices to its consumers
A CNBC-TV18 poll expects modest revenue growth due to subdued volumes and margin to expand on back of lower raw material costs led by fall in crude derivatives.
Gaurang Kakkad, Vice President of Institutional Research at Religare Capital Markets expects a 10-12 percent volume growth from Asian Paints in FY16.
While Prabhudas Lilladher has been cautious on the stock, it continues to maintain its reduce rating and has a target price of Rs 700.
Asian Paints has missed the Street expectation in its fourth quarter ended March. The company has posted a consolidated net profit of 18.6 percent to Rs 341 crore as against Rs 287.4 crore in the corresponding quarter last fiscal.
Key issues to watch out are volume growth trends and demand scenario in urban and rural geographies. Outlook on demand in industrial paints and raw material scenario will also be crucial.
Asian Paints, the largest paint company in India, is likely to see better profitability in Q3 due to favorable raw material costs. Consolidated profit is expected to rise a healthy 29.8 percent year-on-year to Rs 428 crore during October-December quarter.
Prabhudas Lilladher has reduced FY15 and FY16 EPS estimates by 3-4 percent due to higher employee costs and other expenses. It has increased target price to Rs 639 and upgraded rating from reduce to accumulate
Analysts expect domestic sales of the company to increase 16 percent Y-o-Y led by 10 percent Y-o-Y growth in overall volumes and 6 percent pricing/mix improvement.
Sanjay Singh remains neutral because long-term prospects are quite fine but from a one year perspective, there could be some more downside.
Higher depreciation and increase in tax rates should result in a muted PAT growth of 13 percent. Depreciation is expected to increase 60-70 percent and tax rate may jump by 130 basis points Y-o-Y.
According to Motilal Oswal, sales of Asian Paints are expected to increase by 15.3 percent Q-o-Q (up 17.1 percent Y-o-Y) to Rs 3555.3 crore.
According to ICICIdirect.com, revenue of Asian Paints is expected to increase by 12.9 percent Q-o-Q (up 14.6 percent Y-o-Y) to Rs 3481.2 crore.
Persistent macro-economic challenges and weak demand will continue to weigh down heavily on the third quarter performance of the FMCG sector.
Earnings before interest, tax, depreciation and amortisation (EBITDA) may increase 16.7 percent on yearly basis to Rs 421 crore and EBITDA margin may climb 60 basis points Y-o-Y to 14.4 percent during the quarter.
According to a poll, the range for volume growth (domestic decorative paints business) is pegged between 7-10 percent.
According to ICICIdirect.com, Asian Paints to report a 5.4 percent degrowth quarter-on-quarter (growth of 8.8 percent year-on-year) in net profit at Rs 260.3 crore.
According to Motilal Oswal, Asian Paints to report a 5.4 percent degrowth quarter-on-quarter (growth of 8.9 percent year-on-year) in net profit at Rs 260.4 crore.
Asian Paints' first quarter (April-June) consolidated net profit fell 1.7 percent year-on-year to Rs 283 crore, sending shares 3 percent lower. Total income from operations increased 11.5 percent to Rs 2,841 crore in June quarter from Rs 2,548 crore reported in a year ago period, which was lower than expectations.
Increase in advertising spends intensity will further impact Asian Paints' margins, caution analysts.
Emkay Equity Advisory expects Asian Paints to report a 15 percent growth in net profit at Rs 288.9 crore on quarter-on-quarter basis.