Buy Asian Paints; target of Rs 3305: Geojit Financial Services

Geojit Financial Services is bullish on Asian Paints has recommended buy rating on the stock with a target price of Rs 3305 in its research report dated July 19, 2024.

Broker Research

July 19, 2024 / 13:13 IST

BUY

26 Aug, 2025 12:21

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Geojit Financial Services research report on Asian Paints

Asian Paints Ltd. (APNT), is engaged in the business of manufacturing, selling and distribution of paints and related products for home décor. APNT is the market leader in the Indian paint manufacturing industry. Weak demand owing to the general election and severe heat waves had impacted APNT’s Q1FY25 top-line, while the inferior product mix and higher employee costs impacted the margin, which declined by 422bps YoY to 18.9%. In-order to mitigate the input cost inflation, the company took a price hike of 1% in July. The management also hints at further price hikes in the coming months. We factored a de-grade in FY25 and expect a revival in FY26 on account of the positive long term outlook on the sector. The company has doubled the capacity in Mysuru plant from 3lakh KL PA to 6lakh KL PA, which is very positive.

Outlook

Currently, APNT is trading at a P/E of 53x which is at a discount of 14% to its 3yr avg. Due to comfort in valuation and positive long term outlook we revise our rating to BUY with a TP of Rs. 3,305, based on a P/E of 50x on FY26E EPS.

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