Asian Paints is likely to post 9-10 per cent de-growth in profit for the June quarter on a flattish sales. Margin may contract 180-190 basis points year-on-year, but expand sequentially. Volume growth is seen at 6 per cent but value growth may suffer due to weak mix and price cuts.

Anand Rathi said Ebitda may fall YoY due to negative operating leverage, higher ad-spends, and a high base in Q1 on account of a one-off related to the reversal of sick leave provision.

All eyes would be on demand outlook in tier II and tier III towns, raw material and margin outlooks, pricing actions and updates on competitive intensity in the sector.

Kotak Institutional expects the paints maker to report 9.1 per cent YoY drop in net profit at Rs 1,409 crore in the June quarter compared with Rs 1,550 crore in the same quarter last year. It sees revenue Asian Paints falling 1.4 per cent YoY to Rs 9,053 crore from Rs 9,182 crore YoY. Ebitda margin is seen at 17.5 per cent, down 89 basis points over the year-ago period’s 18.4 per cent.

“We estimate 2.5 per cent YoY decline in standalone revenue (largely domestic decorative paints) and high single-digit (6 per cent) volume growth, below the management’s double-digit volume growth (highlighted on 4Q concall). We build 7 per cent growth in subsidiaries, translating into consolidated revenue decline of 1.4 per cent YoY. We expect gross margin at 43.5 per cent aided by relatively stable and benign RM price environment,” it said.

Antique Stock Broking sees Asian Paints’ Q1 profit at Rs 1,408.60 crore while it sees sales at Rs 9,310 crore. Anand Rathi sees profit for Asian Paints falling 10.3 per cent YoY to Rs 1,390 crore on 1.4 per cent drop in sales at Rs 9,052 crore.