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We expect a 270bps drop in EBITDA margins on y.o.y basis in 1QFY12, as cost escalations have
been passed on only in a phased manner. While, AP has taken 3 price hikes in Q1FY12, it has
been towards end of the quarter only. While, we like the stock, given the recent run up, we would
recommend Buy on dips only.
Q1FY12 to reflect a modest EBITDA growth of 4.2% in our view
We expect AP to continue to strong revenue growth momemtum at 20% in 1QFY12 as well.
While, the volume growth which was in high teens in Fy11, would have moderated in 1QFY12
to 11-12% range.
We expect margins to decline at EBITDA level at 17.5%, which would been down 270bps on
a y.o.y basis. However, the margins would have improved by 170bps from the Q4FY11 levels.
Consequently, we expect AP to report EBITDA of Rs3.13bn, which is a 4.12% y.o.y growth,
and a PAT growth of 7.3% at Rs2.15bn
Price hikes taken in May and June 2011, will impact from Q2FY12
AP has taken 3 price hikes in Q1FY12 in a phased manner totalling around 8%. Of these 2
hikes were in the month of June 2011.
We believe that these hikes will impact margins only in the rest of the year.
Akzo Nobel reports 2%drop in PAT in Q2 results
Akzo Nobel, the world's largest paints and coatings company reported Q212 results today in
Amsterdam.
While, the revenues have growth at 5%, it reported a 2%drop in net earnings as rapid rise in
raw material prices dented margins.
We would be cautious on AP ahead of the results next week on 26 July 2011, and buy the
stock only post the results. AP stock has run up 24% since the Q4FY11 results, outperforming
the market by 25%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We expect a 270bps drop in EBITDA margins on y.o.y basis in 1QFY12, as cost escalations have
been passed on only in a phased manner. While, AP has taken 3 price hikes in Q1FY12, it has
been towards end of the quarter only. While, we like the stock, given the recent run up, we would
recommend Buy on dips only.
Q1FY12 to reflect a modest EBITDA growth of 4.2% in our view
We expect AP to continue to strong revenue growth momemtum at 20% in 1QFY12 as well.
While, the volume growth which was in high teens in Fy11, would have moderated in 1QFY12
to 11-12% range.
We expect margins to decline at EBITDA level at 17.5%, which would been down 270bps on
a y.o.y basis. However, the margins would have improved by 170bps from the Q4FY11 levels.
Consequently, we expect AP to report EBITDA of Rs3.13bn, which is a 4.12% y.o.y growth,
and a PAT growth of 7.3% at Rs2.15bn
Price hikes taken in May and June 2011, will impact from Q2FY12
AP has taken 3 price hikes in Q1FY12 in a phased manner totalling around 8%. Of these 2
hikes were in the month of June 2011.
We believe that these hikes will impact margins only in the rest of the year.
Akzo Nobel reports 2%drop in PAT in Q2 results
Akzo Nobel, the world's largest paints and coatings company reported Q212 results today in
Amsterdam.
While, the revenues have growth at 5%, it reported a 2%drop in net earnings as rapid rise in
raw material prices dented margins.
We would be cautious on AP ahead of the results next week on 26 July 2011, and buy the
stock only post the results. AP stock has run up 24% since the Q4FY11 results, outperforming
the market by 25%.
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