Buy Asian Paints; target of Rs 3762: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Asian Paints

We increase our FY22/FY23/FY24 EPS by 13.6%/7%/3.2% given 1) strong pent-up demand 2) long runway for growth in Rurban India 3) bounce back in metro/Tier1/2 demand and 4) strong traction in project business. We believe long term structural levers remain intact led by 1) Market share gains in decorative paints from both organized & unorganized players 2) Increased distribution with addition of 45k+ retail points. 3) Innovations & focus on high growth waterproofing/ construction aids segment 4) Ramp up in Kitchen & Bath business (PBT breakeven in 3Q) and 5) Huge potential in contribution of new verticals of home décor (10%) and Services (7-8%) in 2-3 years. APNT reported sequential improvement in margins on the back of 15% pricing action and superior mix led by strong growth in Metros/Tier1/2 cities. APNT remains confident of sustained improvement as 4Q on positive demand outlook and full impact of price hikes. APNT continues to remain a strong structural play given 1) double digit decorative paints Industry growth 2) innovation and marketing to ensure sustained leadership position and 3) scale up in emerging segments.

Outlook

We expect APNT to sustain premium valuations given strong growth visibility. We maintain BUY with a TP of Rs 3762 (Rs 3675 earlier). Any structural margin correction post Grasim’s entry in Decorative paints is a risk to our call.

More Info

At 16:00 hrs Asian Paints was quoting at Rs 3,112.60, down Rs 4.65, or 0.15 percent.

It has touched an intraday high of Rs 3,170.00 and an intraday low of Rs 3,103.55.

It was trading with volumes of 44,351 shares, compared to its thirty day average of 51,386 shares, a decrease of -13.69 percent.

In the previous trading session, the share closed down 0.92 percent or Rs 29.05 at Rs 3,117.25.

The share touched its 52-week high Rs 3,588.05 and 52-week low Rs 2,261.45 on 10 January, 2022 and 26 February, 2021, respectively.

Currently, it is trading 13.25 percent below its 52-week high and 37.64 percent above its 52-week low.

Market capitalisation stands at Rs 298,559.90 crore.

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