With 2.8% revenue growth observed in Q3FY17, APNT beat our and consensus estimates of a 5% and 1.6% revenue decline respectively. This led to EBITDA too beating our estimates. However, lower than expected other income (affected by the depreciation of the Egyptian pound) led to PAT in line with our estimates.
We expect volume growth for the domestic business to be in low single digits, significantly higher than expectations, reflecting the lower than expected impact of demonetisation. Net sales for the consolidated entity increased 2.8% y-o-y to R38.8 billion, compared with our expectations of a 5% revenue decline.
The Automotive Coatings JV witnessed good demand conditions in the auto OEM segment, and the Industrial Coatings JV business saw good growth in the Industrial Liquid Paints and Powder Coating segment. The international business reported good numbers, aided specifically by contributions from good pick-up in demand in Nepal and Fiji, and certain units in the Middle East.
The kitchen and bath businesses in the home improvement category felt the impact of delayed sales on account of demonetisation.Egypt implemented a flexible exchange rate regime effective November 3 2016. Consequently the Egyptian pound depreciated significantly against dollar,and as a result the other income for Q3FY17 is lower by Rs 103 million.