Accumulate Asian Paints; target of Rs 2774: Dolat Capital Market

Dolat Capital Market's research report on Asian Paints

APL’s Q3FY21 revenues, EBITDA and APAT came ahead of our estimate as pent up and festive demand was higher compared to our expectation. The company witnessed 33% volume growth during the quarter. IB posted 22.4% growth as Asia and ME posted strong double digit growths; Ethiopia, Bahrain and Indonesia were laggard. Considering improvement in demand, we believe that the growth rate would remain high going ahead as well. Consequently, we have upward revised our EPS estimates for FY21E, FY22E and FY23E at Rs 31.8 (+10.8%), Rs 39.3 (+8.6%) and Rs 46.2 (+8.3%) respectively.

Outlook

Valuing the stock at 60x, we have arrived at a TP of Rs 2,774. Maintain Accumulate. Buy on dips.

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