Reduce Asian Paints target of Rs 2230: Prabhudas Lilladher

Prabhudas Lilladher recommended reduce rating on Asian Paints with a target price of Rs 2230 in its research report dated November 11, 2024.

Broker Research

November 12, 2024 / 12:11 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Asian Paints

We cut FY25/FY26/FY27 EPS by 16.4%/18.4%/18.3% given 24.4% decline in 2Q Consol PAT and muted outlook for 2H25. APNT volume decline of 0.5% indicates some loss of market share as most competitors have grown volumes by 3-4%. While it is too early to cite any impact of Birla opus on the market dynamics, competitive intensity is on the rise, which has also forced APNT to give higher discounts to trade to sustain their ROI. We believe APNT will sustain more incentives to trade as this has been its biggest strength over the years. While we expect sequential volume recovery to set in, APNT guidance for 2H seems weak given high base and heightened competition. We believe regaining lost share might be tough given changed competitive dynamics.

Outlook

However, we expect situation to improve from FY26 onwards and factor in 6.7% revenue growth & 5.6% PAT growth (impacted by higher capex and depreciation) over FY25-27. APNT trades at 51.5x FY27 EPS. We cut DCF based target price to Rs 2230 (Rs2605 earlier). Re-Rating seems a long drawn affair given likely impact of Birla opus and rich valuations. Retain Reduce.

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