Asian Paints Q4 profit may grow in double-digits, but slowdown could hit revenue

Asian Paints, one of the largest paint manufacturers, is expected to report double-digit growth in bottomline for the quarter ended March 2020, but revenue growth could be flat to negative on account of already slowed down environment in industrial/auto segments and COVID-19-led lockdown. Quarterly earnings will be announced on June 23.

Brokerages expect the company's profit to grow in the range of 12-15 percent compared to year-ago period, driven by operating income and lower tax cost.

The COVID-19 outbreak and subsequent lockdown impacted sales in the last 10 days of the quarter. "We model a 4.5 percent YoY decline in domestic sales (standalone) led by 1 percent volume growth and negative 5.5 percent price/mix. Continued higher sales of economy products would impact product mix on YoY basis, though we expect some improvement in product mix on sequential basis and hence narrowing of gap between volume growth and revenue growth. We expect international business revenues to decline by 5 percent YoY," said Kotak Institutional Equities which sees 15 percent YoY rise in profit in Q4.

According to Narnolia, Asian Paints' revenue is expected to remain flat on account of turbulence caused by COVID-19 in Q4FY20.