Buy Asian Paints; target of Rs 3685: ICICI Direct

ICICI Direct's research report on Asian Paints

Asian Paints (APL) is India’s largest decorative paint company. The company derives ~98% revenue from the paints business while 2% business comes from the home improvement business (kitchen and bathroom fittings). Strong distribution network of 70,000 dealers, 2x more than the No. 2 player • Despite being in a capital intensive business, the company has maintained a strong balance sheet with RoCE, RoE of 30%, 25%, respectively.

Outlook

We maintain our BUY rating on the stock. We revise our target price to Rs 3685/share and value APL at 68x P/E FY24E EPS.