Moneycontrol
May 15, 2017 04:19 PM IST | Source: Moneycontrol.com

Buy Asian Paints; target of Rs 1269: Edelweiss

Edelweiss is bullish on Asian Paints has recommended buy rating on the stock with a target price of Rs 1269 in its research report dated May 11, 2017.

Buy Asian Paints; target of Rs 1269: Edelweiss

Edelweiss' research report on Asian Paints


APL’s standalone sales grew 9.4% YoY (paint sales jumped 10.4% YoY from 0.6% YoY in Q3FY17), though gross and EBITDA margins dipped 160bps and 112bps YoY, respectively. While the auto JV (PPG-AP) improved led by auto OEM and general industrial business segments, industrial JV (AP-PPG) was driven by liquid paints, road marking paints and powder coatings.


Outlook


We believe, APL will be key beneficiary of potential recovery in GDP, rising urbanisation and government’s housing push. Hence, in our view, decorative volumes will pick up from FY18. The stock is trading at 38.6x FY19E EPS. We maintain ‘BUY /SO’ with target price of INR 1,269.


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