Asian Paints Q3 PAT seen up 8.5% at Rs 363.8cr: MOST

Motilal Oswal has come out with its October-December earnings estimates for the consumer sector. The brokerage house expects Asian Paints to report a 11.3 percent growth quarter-on-quarter (up 8.5 percent Y-o-Y) in net profit at Rs 363.8 crore.

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 Motilal Oswal.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 19.2 percent Q-o-Q (up 15.7 percent Y-o-Y) to Rs 572.4 crore.

Motilal Oswal on Asian Paints:

We expect Asian Paints to post 17 percent revenue growth to INR 35.6 billion in 3QFY14, with another quarter of double-digit domestic decorative paints volume growth.

We estimate 4 percent pricing growth during the quarter.

Operating margins would be flat at 16.1 percent, led by gross margin uptick of 100bp, as the full impact of price hikes taken in 2QFY14 flows through the P&L.

International business is likely to report mixed performance, with continued weakness in the Caribbean being offset to an extent by Middle East and Asia.

We estimate PAT growth at 8.5 percent, slightly subdued due to higher base (30.5 percent growth in 3QFY13).

The stock trades at 30.3x FY15E EPS of INR 16.

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