Hold Asian Paints; target of Rs 2341: KR Choksey

KR Choksey's research report on Asian Paints

For Q3FY25, APNT recorded revenue of INR 85,494 Mn, declined by 6.1% YoY (+6.5% QoQ), missing our estimates by 4.2%. In Q3FY25, EBITDA declined by 20.4% YoY (+32.0% QoQ) to INR 16,367 Mn, beating our estimate due to lower than estimated operating expenses. Adj. PAT stood at INR 11,108 Mn, declined by 23.3% YoY (+26.9% QoQ), beating our estimate. We revise our FY26E/FY27E EPS estimates down by 3.6%/2.5%, mainly due to weak volume growth driven by subdued demand, margin pressure, and intensified competition, which is affecting pricing power and market share.

Outlook

The stock is currently trading at 45.0x/ 41.3x to our Adj. EPS estimate for FY26E/ FY27E, respectively. We roll over our valuation to FY27E, assigning a P/E multiple of 43x on FY27E EPS of INR 55.1 (previously: 56.5). Given the 2.9% upside potential, we maintain our “HOLD” on the shares of Asian Paints.