Asian Paints hits a new high

Asian Paints has posted a real rainbow kind of earnings for Q1FY19 – beautiful and amazing, beating all expectations. On a 15% (YoY) rise in revenue at Rs.4391 crore, it posted a very good 31% jump in net profit at Rs.558 crore.

Both the paint segments – paint as well as home improvement did well with the former still being the main bread and butter, showing a 15% jump in topline and home improvement sales rose 44%.

EBITDA came in at Rs.876 crore, up 32% while margins rose by a very good 250 bps to 19.9% and this was despite a 14% rise in raw material cost.

With crude prices on the rise, surely raw material costs will remain a concern and Q2 as such is seasonally weak due to monsoon. Thus how much of the GST rate cut benefit the company would be able to pass needs to be seen.

Reacting to this good earnings, the stock price rose to hit a new high at Rs.1488.60 but with profit booking coming in at that level, the stock has now slipped into the red.