Asian Paints Q1 net seen up 22%, revenue may rise 7%: Poll

Asian Paints, one of the largest paint manufacturing companies in India, will announce its first quarter earnings on July 21. Consolidated net profit is seen rising 22 percent year-on-year to Rs 412 crore in the quarter ended June, aided by operational performance.

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.

Revenue is likely to increase by 7.4 percent to Rs 3,612 crore from Rs 3,362 crore during the same period. Operating profit may jump 10.8 percent year-on-year to Rs 616 crore and margin may expand 30 basis points to 17 percent in the quarter gone by.

Gross margin is expected to expand between 200-300 basis points due to lower crude oil prices. About 40-45 percent of raw material cost is directly or indirectly related to crude that has fallen 50 percent in 1 year with Titanium Dioxide prices down 12 percent.

Analysts expect volumes to pick up sequentially, though still subdued on overall basis. They expect volumes growth in the range of 3-8 percent.

Market share gains are likely to sustain for Asian Paints in June quarter. It has 53 percent market share among top 5 players in India, said Jefferies in its report.

According to Bank of America Merrill Lynch, domestic sales may rise 8 percent and international business may grow 12 percent in first quarter.

Factors that may bear down on Q1 are flattish price/mix led growth due to recent price cuts, full impact of price cuts of 2-4 percent (in Q4FY15) to be seen in Q1FY15, continued moderation in paints demand and stretched working capital cycles.