Buy Asian Paints; target of Rs 885: Emkay Global

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Emkay Global's report on Asian PaintsResults below estimates…miss on topline. Consolidated revenues +4% yoy to Rs 37.8bn, EBITDA +16% yoy to Rs 6.2bn & APAT +15% yoy to Rs 4bnVolume in high single digit led by economy segment, but mix weakens revenue growth. Interim strategy of focusing on low-end segment to gain share is working well. Company is cautious on demand; upcoming festive season and urban uptick are key volume triggersGross margin expansion continues, but higher other expense curtail EBITDA margins to 16.4%, up 170bps. Subsidiaries margins continue to impress. In addition to low input cost, volume revival in mid & premium segment of decorative paints and improving subsidiaries margin are key margin leversWe have cut revenues by 4%/5% and earnings by 5%/6% for FY16/17E, but we maintain our positive bias on Asian Paints and expect strong uptick in volumes in second half of FY16. We retain BUY with revised price target of Rs 885/shareSteady volumes, but weaker mix weighs on growth; Retain BUY Company continues to post steady volumes, although in low/economy segment, which has impacted mix and subsequently revenue growth. While demand sentiments are subdued and rural demand under pressure, hope of revival in upcoming festive season and likely uptick in urban demand are key volume triggers. We have cut revenues by 4%/5% and earnings by 5%/6% for FY16/17E. We maintain our positive bias on Asian Paints and believe sharper uptick in volumes in second half of FY16. We maintain BUY with revised target price of Rs 885/share (35x FY17E), says Emkay Global Financial research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More