Geojit Financial Services' research report on Asian Paints
In Q3FY18, revenue grew by 10.6% YoY to Rs 4,267cr (below estimate) on account of subdued volume growth of 6.5%. Management stated that extended monsoon in southern part coupled with split in festival demand between Q2 & Q3 impacted the topline growth. In the International operations, Units in Nepal, Bangladesh, Oman and Bahrain continue to stay on the growth trajectory.
Outlook
Strong presence in decorative paint and cost control initiatives to contain pressure on inflating raw material price will improve margins and profitability. We roll over our valuation to FY20E EPS and upgrade our rating to Buy with a target price of Rs 1,283, based on a P/E of 42x FY20E earnings.
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