KR Choksey's research report on Asian Paints
Asian Paints revenue missed our estimates due to subdued demand environment, and significant decline in the pricing. The EBITDA missed our estimate due to the increase in operating expenses and unfavourable product mix. Increasing market share in the decorative segment will be challenging with the entry of new competitors. We have trimmed our FY25E/FY26E EPS estimates by 12.0%/1.0% respectively as we believe the margins are under pressure. The stock is currently trading at 59.3x/ 48.3x to our Adj. EPS estimate for FY25E/ FY26E, respectively.
Outlook
We assign a P/E multiple of 49.0x (maintained) on FY26E EPS of INR 61.0 (INR 61.4 earlier) to arrive at a target price of INR 2,989/share (INR 3,007/share previously). Given the 1.5% upside potential, we downgrade our rating to “HOLD” from ‘ACCUMULATE' on the shares of Asian Paints.
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