Moneycontrol PRO
HomeNewsBusinessStocksHold Asian Paints; target of Rs 3527: Prabhudas Lilladher

Hold Asian Paints; target of Rs 3527: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Asian Paints with a target price of Rs 3527 in its research report dated July 25, 2023.

July 27, 2023 / 17:21 IST
hold
     
     
    26 Aug, 2025 12:21
    Volume
    Todays L/H
    More

    Prabhudas Lilladher's research report on Asian Paints

    We cut rating from Accumulate to Hold given valuations of 53.5xFY25 EPS and expected increase in competitive intensity from Grasim and JSW in coming years. We upgrade our FY24/25 EPS by 3.4/3.5% but given 1) strong demand outlook (10% volumes during 1Q24) and 2) benign raw material outlook and stable pricing environment and 3) sustained strength in Industrial paints (Auto and non-auto industrial). 1Q saw a sharp 190bps QoQ EBITDA margin recovery to 23.1% supported by 40bps QoQ gross margin improvement. IBD margins remain under pressure with uncertain currency outlook while Home décor is showing mixed growth due to high base in kitchen and bath segments. Long term growth levers are intact led by 1) market share gains in decorative paints 2) sustained increase in distribution (addition of 6k retail touch points in 1Q24) 3) focus on high growth waterproofing/wood finishes/ projects business 4) scalability plans in home décor from 4-5% to 8-10% of sales by FY26 (both organic and inorganic).

    Outlook

    However, re-rating potential is limited given expected increased in competition and rich valuations. We value stock on DCF and assign target price of Rs3527 (Rs3360 earlier). Cut to Hold.

    For all recommendations report, 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.

    Asian Paints - 26 -07 - 2023 - prabhu

    Broker Research
    first published: Jul 27, 2023 05:21 pm

    Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

    Subscribe to Tech Newsletters

    • On Saturdays

      Find the best of Al News in one place, specially curated for you every weekend.

    • Daily-Weekdays

      Stay on top of the latest tech trends and biggest startup news.

    Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347