Q1FY22 Results: Asian Paints Share Market
Continued momentum from last quarter i.e., Q4 FY 20-21, witnessed on April 21. May’21 impacted with the 2nd wave.
June 21 witnessed an uptick with gradual withdrawal of restrictions.
Material Prices seeing steep inflation since Q3 FY20-21. Q4 FY21 saw about 8%-10% inflation from the previous quarter and material prices have seen a further inflation of 13%-15% in Q1 FY22.
Asian Paints Price History increases implemented across businesses negating only a part of this impact. 3% Price increase taken in Q1.
Growth this time led by T1/T2 centers unlike Q1 last year when T3/T4 grew faster given severe lockdown in T1/T2.
There was 106% volume growth and 95% value growth in Q1FY22.
Profit margins have decreased in Q1FY22 as compared to Q4FY21. Management has said that steep material inflation leads to contraction in margin.
International business performance: Asian Paints Value Chain Analysis
Interrupted business conditions hurt the good momentum of the last few quarters.
Growth led by Asia & Middle East.
Africa is impacted by local challenges as well as steep inflation.
Focused push on Waterproofing & increasing share of Premium / Luxury emulsions continues to yield strong results across markets.
Industrial business performance:Asian Paints Annual Report
Revenue growth coming off an extremely low base last year.
Refinish Business faced challenges with body shops under timing restrictions
Robust performance in the Industrial Liquid Paints segment, even accounting the low base.
Strong project orders in Protective coatings supporting growth.
While Gross margins were impacted with material inflation, Profitability in both businesses supported by contained costs during the period.
Home Improvement business performance: Asian Paints Annual Results
Full Kitchen solutions leading growth.
New full kitchen dealer openings, luxury offerings supporting growth.
Supported by growth in Project’s segment.
Strong collaboration with Decorative Projects.
Losses at PBT level lower in both businesses over last year, due to improved scale.
Consolidated financials: Asian Paints Share Value Research
For the quarter ended June 30, 2021, Revenue from operations has increased by 91.1 % to Rs 5,585.36 crores from Rs 2,922.66 crores.
Profit before depreciation, interest, tax and other income (PBDIT) for the group (before share in profit of associates) increase
d by 88.7% to Rs 913.56 crores from Rs484.25 crores. Profit Before Tax (PBT) increased by 154.6% to Rs 778.58 crores from Rs 305.76 crores.
Net Profit after Minority Interest increased by 160.2% to Rs 568.50 crores as compared to Rs 218.45 crores in the previous corresponding period.
Steep material inflation leading to contraction in Gross Contribution margin by 631 bps.
Looking forward: Asian Paints Fundamental Analysis
Demand outlook looks positive, especially with 2nd wave abetting. Good monsoon forecast would further support demand, especially from rural sector
Long Diwali season would help Sept-Oct 21 Retail. Critical to avoid 3rd wave / any further waves to retain full normalcy
Some key raw materials showing early signs of softening; Will have to see this trend emerging more strongly
Asian Paints Company Profile has announced one more price increase effective 1st July of about 1% at portfolio level