Prabhudas Lilladher's research report on Asian Paints
We are increasing FY22 and F23 EPS by 10.9% and 7.6% and assign Hold rating on the back of robust growth outlook driven by 1) Increase in domestic decorative volume by 33% 2) Revival in consumer sentiment and pickup in housing construction activity 3) improved mix in tier1/2 cities and 4) pick up in International, auto and industrial coating business. We believe 4Q21 and 1Q22 should report strong volumes due to very poor base and strong market share gains, although incremental margin expansion looks unlikely due to higher input costs.
We estimate 14.7% sales and 19% CAGR in PAT over FY21-23. We assign Hold rating with a DCF based target price of Rs2829. We would a buyer in the stock on corrections for long term gains only.
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