Asian Paints Q1 FY23 Earnings: Profits Surge, Beat Estimates

Asian Paints Q1 FY23 Earnings
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Asian Paints on Tuesday afternoon declared its Q1FY23 results. The numbers are above the analysts' expectations. The share price was trading in red before the result announcement but it ended in the green at Rs 3105, up 0.06%.

Asian Paints Q1 FY23: Key Highlights

  • Revenue: Rs 8,578.88 crore, up 55% year-on-year
  • Profits: Rs 1,016.93 crore, up 78.9% year-on-year
  • PBDIT: Increased by 70.3% to Rs 1,555.95

Let us look at Asian Paints' Q1FY23 numbers in detail:

Asian Paints Q1 Results: Increase in revenue

The consolidated revenue for Asian Paints rose by 55% year-on-year to Rs 8,578.88 crore in the June quarter. In the year-ago period, the consolidated revenue was Rs 5,534.97 crore. The standalone revenue was up by 59.6% to Rs 7,555.80 crore. The revenue is higher than the Street estimate of Rs 7,294 crore.

Asian Paints Q1 FY23 Earnings: Net profit surge

The net profit on the consolidated basis was up 78.9% and stood at Rs 1,016.93 crore. In the same quarter last year, the consolidated net profit was Rs 568.50 crore. The net profit is above the analyst forecast of Rs 950 crore. The profit surged as the company's volume growth registered during the quarter is one of the highest in the last 6 quarters.

Asian Paints Q1 FY23 Earnings: PBDIT

PBDIT (Profit before depreciation, interest, tax, other income, and exceptional items) increased by 70.3% to Rs 1,555.95 crore from Rs 913.56 crore in the year-ago period. Profit before exceptional items and tax increases by 83.8% to Rs 1,430.83 crore from Rs 778.58 crore.

Asian Paints Q1 Results 2022: Bath Fitting and Kitchen Business

Sales from the Bath fitting business increased by 120.1% to Rs 117.99 crore from Rs 53.61 crore in the year-ago period. PBDIT increased to Rs 4.21 crore from a loss of Rs 1.04 crore in the year-ago period.

The Kitchen business sales increased to Rs 109.04 crore from Rs 64.79 crore in the same quarter last year. PBDIT loss for Kitchen business reduced to Rs 4 crore as against a loss of Rs 5.38 crore in the last year.

Asian Paints Q1 FY23: New Business Acquisition

Asian Paints subscribed to 51% of the equity share capital of Weatherseal Fenestration Private Limited for a consideration of Rs 18.84 crores on 14th June 2022. It also acquired 49% of the equity share capital of Obgenix Software Private Limited on 2nd April 2022 for an upfront cash consideration of Rs 179.67 crores along with an earn-out payable after a year.

Asian Paints Q1 FY23 Earnings: Update on Sri Lankan Business

The current economic crisis in Sri Lanka has led to currency devaluation. FOr the paint company, it has resulted in the recognition of an exceptional item of Rs 24.21 crore towards exchange loss arising on foreign currency obligations of Causeway Paints Lanka Limited (Causeway Paints).

Asian Paints Q1 FY23 Earnings: Analysts' Call

Motilal Oswal: The firm has given a NEUTRAL rating with a target price of Rs 2840 per share. As per the brokerage house, Asian Paints has delivered an earnings CAGR of 11.6% over the past five years (FY17-22). The stock price has delivered a 24.1% CAGR, implying a significant re-rating. They have assumed FY24 gross/EBITDA margin at the top end of the management’s guidance of 41-42%/18-20%. While they expect RoE to improve, it will still be lower than the 30-40% recorded in the first half of the decade. At 54.1x FY24E P/E, the stock remains expensive.

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