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Asian Paints share rises 6% on price increase; Nomura says another hike needed

Asian Paints has hiked the prices of its products by 7-10 percent, effective from November 12, a Kotak Institutional Equities report has said

October 27, 2021 / 10:07 AM IST
 
 
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Asian Paints share price added nearly 6 percent in the morning trade on October 27 after the company hiked prices by 7-10 percent.

Asian Paints increased by 10 percent prices across product portfolio except for enamels (6-7 percent price hike); blended price increase at the portfolio level is 8-9 percent, Kotak Institutional Equities said in a report citing dealer interactions. The new prices will be effective from November 12, it said.

On October 21, the company reported a 29 percent year-on-year decline in consolidated profit at Rs 605.2 crore for the quarter ended September 2021, as higher input prices dented operating income, missing analysts' expectations.

Higher sales volumes pushed consolidated revenue growth higher than expected at 32.6 percent year-on-year to Rs 7,096 crore.

Nomura

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The research firm said the channel checks indicate a price hike of 9 percent across portfolios, which is higher than its cumulative hike over the last six months (7.5 percent in H1FY22).

With a sharp price hike, expect the margin gap to be materially bridged, while the company will require a 5 percent additional price increase to fully bridge the gap.

Macquarie

The company has announced the price hike with Rs 3 per litre across entry-level distempers and Rs 12 per litre across enamels.

Prices have also been raised by Rs 35-45 a litre across Premium Royale & Ultima brands. The waterproofing segments will see Rs 15–25 per litre price hike and wood coatings will see Rs 25-50 plus per litre hike.

At 9.28 am, Asian Paints was quoting at Rs 3,120, up Rs 156.85, or 5.29 percent, on the BSE.

The share touched a 52-week high of Rs 3,504.05 on September 24, 2021 and a 52-week low of Rs 2,070.50 on October 26, 2020. It is trading 10.96 percent below its 52-week high and 50.69 percent above its 52-week low.
Moneycontrol News
first published: Oct 27, 2021 10:07 am

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