Sharekhan's research report on Asian Paints
Asian Paints Limited’s (APL’s) Q4FY23 performance beat ours as well as the street’s expectations with decorative paint volume growth at 16%, above street expectations of 10-12%. OPM came at 21.2% vs. street estimates of 19-20%. Paints industry to clock CAGR of 10-12% in the next five years to a Rs. 1 lakh crore market. Management is confident of maintaining double-digit volume growth in domestic decorative paints business with key drivers in place. Lighting, furnishing and window panel categories under home décor business would grow at upwards of 50%. Home décor business to reach 8-10% from current 4.5% in next five years.
Outlook
Stock trades at 59x/50x its FY2024E/25E EPS. We maintain Buy with revised PT of Rs. 3,510.
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