“Good demand conditions in the auto OEM and general industrial business segment led to improved performance of the automotive coating JV (PPG-AP). The performance of industrial coating JV (AP-PPG) saw an improvement in the current quarter based on good growth registered in the powder coating segment,” said K.B.S. Anand, Managing Director & CEO, Asian Paints.
Asian Paints 4QFY18 operating performance was healthy and slightly better than our expectations. Domestic paint volumes grew at estimated 11% YoY, which was an improvement over the previous quarters of FY18. EBIDTA (Earnings before interest, tax, depreciation and amortization) margin expanded 62bps YoY due to lower pressure on gross margins and control on discretionary expenditure, analysts at Antique Stock Broking said in result preview.
As per the management, pressure from raw material prices will continue in the short term. But in our view, price hikes of about 1.4% and 2.7% in March 2018 and May 2018 respectively coupled with cost control initiatives will support profit margins, added note.
The brokerage firm maintains ‘buy’ rating on the stock with target price of Rs 1,348 as it believes that revenue growth should revive during FY19 led by recovery in rural demand.
At 09:55 am; the stock was up 5% at Rs 1,273 on the BSE, as compared to 0.18% rise in the S&P BSE Sensex. A combined 1.57 million shares changed hands on the counter on the BSE and NSE so far.