EUR 120.00 For Business Accounts Only

MOSL: MOrning India (27/July/22): 1. Asian Paints (Healthy demand growth leads revenue beat, valuations expensive); 2. Tata Steel; 3. Bajaj Auto; 4. United Spirits; 5. Macrotech Devel.; 6. Union Bank of India

Asian Paints: Healthy demand growth leads revenue beat, valuations expensive

• The momentum witnessed in Feb-Mar’22 sustained in 1QFY23, leading to a 10-12% beat in sales/EBITDA/PAT v/s our expectations.
• EBITDA margin was in line with our forecasts and as expected (highlighted in our channel check note) was supported by ongoing mix improvements, even as commodity cost pressures sustained at higher levels in 1QFY23.
• Demand in Tier I and II centers is growing faster as was the case in 4QFY22, leading to better mix, especially in sales of products like premium emulsions. Tier III and IV centers are seeing some downtrading due to steep price increases.
• The current valuations (~50.9x FY24E P/E) fully capture the upside over the next one-year. We maintain our Neutral rating.

Piping hot news

Coke India reports best-ever quarter by volumes in April-June

Beverage maker Coca-Cola’s India unit reported its best quarter by volume sales in the April-June quarter, as the early onset of an intense heatwave and focus on single-serve packs pushed sales to an all-time high, it said while announcing its quarterly earnings. Addressing an earnings call late Tuesday, Coca-Cola global chairman James Quincey said: “In India, we delivered our best-ever quarter volumetrically, delivering 1 billion incremental transactions in the quarter led by affordable single serve packs.”