Buy Asian Paints; target of Rs 3717: Firstcall Research

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Buy Asian Paints; target of Rs 3717: Firstcall Research

Firstcall Research is bullish on Asian Paints and has recommended buy rating on the stock with a target of Rs 3717 in its September 05, 2011 research report.

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Firstcall Research is bullish on Asian Paints and has recommended buy rating on the stock with a target of Rs 3717 in its September 05, 2011 research report.

"Asian Paints is India's largest paint company and Asia's third largest paint company, with a turnover of Rs 77.06 billion. The group has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 22 countries and has 27 paint manufacturing facilities in the world servicing consumers in over 65 countries. Besides Asian Paints, the group operates around the world through its subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and Taubmans."

"Asian Paints Ltd has posted net sales of Rs 22603.70 million for the quarter ended on June 30, 2011 as against Rs 18302.20 million in the same quarter last year, an increase of 23.50%. It has reported net profit of Rs 2636.60 million for the quarter ended on June 30, 2011 as against Rs 2221.90 million in the same quarter last year, a decline of 18.66%. Total income grew by 23.92% to Rs 22909.00 million from Rs. 18486.30 million in the same quarter last year. During the quarter, it reported earnings of Rs 27.49 a share."

"At the current market price of Rs.3290.00, the stock is trading at 34.14 x FY12E and 30.95 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.96.37 and Rs.106.29 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 6% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 20.72 x for FY12E and 18.84 x for FY13E. Price to Book Value of the stock is expected to be at 10.02 x and 7.50 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 3717 for medium to long term investment," says Firstcall Research report.

Institutional holding more than 40% in Indian cos

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To read the full report click on the attachment