Asian Paints has posted a strong and steady October-December quarter, beating street estimates on all counts. 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. The company bore an impairment loss of Rs 52 crore taken on ‘goodwill consolidation’. This item is recognised on acquisition of Sleek. Asian Paints had entered the modern kitchen space after acquiring a 51 percent stake in Sleek Group for about Rs 120 crore in August 2013.
Revenue, during the period, grew 13.9 percent to Rs 4160 against Rs 3653 crore in year-ago period. Delayed festive season and pick up in premium segment aided revenue in Q3.
Analysts polled by CNBC-TV18, expected Asian Paints to register consolidated profit growth of 26 percent year-on-year at Rs 464 crore and revenue rising 11.4 percent to Rs 4,069 crore in Q3.
During the period under review, its EBITDA jumped 37.1 percent at Rs 800 crore versus Rs 584 crore and EBITDA margins was at 19.2 percent versus 16 percent year-on-year. Its gross margins expanded 330 basis points (bps) to 47.1 percent against 43.8 percent (Y-o-Y).
Its margins expand substantially on back of increasing premium volumes and advantages provided by benign input costs continued to aid margins.
Asian Paints volumes in economic segment remained steady while premium segment volumes saw a pick up in December quarter. The company also continued to gain market share against its peers. During the period, raw material costs climbed 3.7 percent at Rs 1909 crore.
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