Asian Paints Q2 Preview: Weak demand to drag revenue, profit lower
Revenue from operations during the second quarter is likely to fall by a marginal 0.2% year-on-year, according to an average estimate of four brokerages.
Net profit, meanwhile, is seen declining 7% year-on-year, the estimates revealed. Operating margins and profit are also estimated to drop, led by negative operating leverage and heightened operating costs in the light of increased competition.
Axis Securities
We estimated volume growth of 6%, while value growth flat, impacted by weak mix and price deflation. EBITDA is expected to decline on account of negative operating leverage, higher ad-spends. Key monitorables are the demand outlook — metros/tier 2/3 towns; RM outlook; margin outlook; pricing actions; and competitive intensity.
Kotak Equities
We expect a 1% YoY decline in standalone revenue (largely domestic decorative paints) and 8% volume growth despite a weak base (2QFY24 was impacted due to the late festive season), as demand was a bit subdued in the current quarter. We build ~4.5% growth in subsidiaries, translating into a consolidated revenue decline of 0.3% YoY.
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