Daily Brief India: Asian Paints, Akums Drugs and Pharmaceuticals, LIC Housing Finance and more

In today’s briefing:

Asian Paints (APNT IN) | Navigating Turbulence
Akums Drugs and Pharmaceuticals: Limited Downside Is Seen, Long-Term Growth Story Intact
LIC Housing Finance (LICHF): Strong Q2 Led by Asset Quality Stabilization

Asian Paints (APNT IN) | Navigating Turbulence

The paint industry experienced significant challenges in Q2FY24, with most companies reporting subdued performance.
Asian Paints reported typical fluctuations in market share of 1-1.5%, while Berger Paints and AkzoNobel both reported gains in their respective market positions.
Asian Paints’ current market share reduction and increased competitive pressure stem from its size and the slowing macro environment.

Akums Drugs and Pharmaceuticals (0200361D IN) shares are currently trading below their IPO price post Q2FY25 result announcement. Compared with year-ago quarter, Q2FY25 revenue and adjusted EBITDA declined.
Digging deeper into the seemingly weak Q2FY25 result, we have come across some positive takeaways. With some of the recent developments, the company is well-positioned for long-term growth.
The share price reaction is overdone. Over the last one month, Akums shares gained 6.5% and outperformed most of its domestic peers, as the long-term growth prospect remains intact.

Optically speaking LICHF’s Q2FY25 results may not look as strong given modest PAT growth of 12% YoY, however, there was substantial improvement in asset quality and credit cost.
Annualized credit cost has stabilized to below 0.2% of AUM for the past couple of quarters, in line with the historical averages.
Last few quarters saw significant variation in earnings due to NIM variation, however, it has now stabilized at around 2.7% vs 3%+ earlier, making the earnings more predictable going forward.

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