 "Asian Paints: Volumes driven by strong distribution; low-end products")
Shares of Asian Paints, Berger Paints India and Kansai Nerolac Paints were trading higher by nearly 2% each in otherwise weak market on expectation of strong volume growth for the quarter ended June 2016.
At 11:33 AM, Asian Paints (up 2.4% at Rs 1,011), Berger Paints (1.8% at Rs 293) and Kansai Nerolac Paints (1.8% at Rs 319) were up more than 1% each as compared to 0.32% decline in the Nifty 50 index. Most of these stocks are trading close to their respective lifetime highs.
These three paint companies had posted an average 27% year-on-year (YoY) jump in net profit on back of 12% growth in net sales for the quarter ended March 2016.
According to ICICI Securities, paint companies are expected to record volume growth of 11-12% YoY for the quarter ended June 2016, supported by a change in the product mix while realization growth is expected to remain muted.
“We believe paint companies will record flat margin YoY due to stabilisation of input cost (higher base last year). Benefit of lower raw material prices (around 4% YoY decline in TiO2 prices) is likely to be partially offset by rupee depreciation by around 6% YoY,” brokerage firm said Q1 results preview.
“Asian Paints and Berger Paints are likely to post strong volumes (expect 8-9% YoY volumes for each) for the quarter ended June 2016,” Edelweiss Securities said in a report.
At 11:33 AM, Asian Paints (up 2.4% at Rs 1,011), Berger Paints (1.8% at Rs 293) and Kansai Nerolac Paints (1.8% at Rs 319) were up more than 1% each as compared to 0.32% decline in the Nifty 50 index. Most of these stocks are trading close to their respective lifetime highs.
These three paint companies had posted an average 27% year-on-year (YoY) jump in net profit on back of 12% growth in net sales for the quarter ended March 2016.
According to ICICI Securities, paint companies are expected to record volume growth of 11-12% YoY for the quarter ended June 2016, supported by a change in the product mix while realization growth is expected to remain muted.
“We believe paint companies will record flat margin YoY due to stabilisation of input cost (higher base last year). Benefit of lower raw material prices (around 4% YoY decline in TiO2 prices) is likely to be partially offset by rupee depreciation by around 6% YoY,” brokerage firm said Q1 results preview.
“Asian Paints and Berger Paints are likely to post strong volumes (expect 8-9% YoY volumes for each) for the quarter ended June 2016,” Edelweiss Securities said in a report.
