Hold Asian Paints; target of Rs 1181: ICICI Direct

ICICI Direct’s research report on Asian Paints
Asian Paints  (APL) recorded  muted volume growth of ~ 2 % YoY  in Q 1 FY1 8 due to  a  sharp decline in primary sales in  May 2017 and  June 2017 . This was on account of de - stocking of inventory at dealer level before implementation of GST.Additionally,  the  company has  taken price hike of ~3% YoY to partly offset the higher raw material  cost.  Further, industrial paint  demand  (automotive , powder coating)  stayed intact  in the  auto OEM and industrial liquid paint segment.

Outlook

We maintain our  HOLD rating on the stock with  a  revised  targ et price of | 1181 per share (valuing 44xFY19E earnings).

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