Accumulate Asian Paints; target of Rs 2781: Dolat Capital Market

Dolat Capital Market's research report on Asian Paints

APL’s Q4FY21 revenues came ahead of our estimate but EBITDA and APAT was in line. RM inflation restricted growth in profitability during the quarter. Domestic business posted 46.2% net sales growth on the back of 48% volume growth. Premium range exhibited robust growth. IB posted 22% growth as Asia, ME and Africa posted strong double digit growth.

Outlook

Lockdowns and RM inflation would restrict growth in the near term. Consequently, we have downward revised our EPS estimates for FY22E at Rs 36.5 (-7.0%) but maintained FY23E EPS at Rs 46.4. Valuing the stock at 60x, we have arrived at a TP of Rs 2,781. Maintain Accumulate. Buy on dips.