Securities has a sell call on Asian Paints with a target price of Rs 2550. The current market price of Ltd. is Rs 2992.7. The period given by the analyst is one year when the price of Asian Paints Ltd. can achieve the set goal.

Asian Paints Ltd., incorporated in 1945, is a large capitalization company (having a market capitalization of Rs 296042.01 Crore) operating in the building materials sector.

Major products/revenue segments of Asian Paints Ltd. include paints, enamels, varnishes and black, other operating revenue and sale of services for the year ending March 31, 2021.


For the quarter ended 31-03-2022, the company reported consolidated total revenue of Rs 7973.06 Crore, down -7.28% from last quarter, total revenue of Rs 8599.05 Crore and up 18.53% compared to the same quarter last year. Total revenue of Rs 6726.84 Crore. The company reported a net profit after tax of Rs 865.12 Crore last quarter.

Investment rationale
Asian Paints (APNT) performance in the fourth quarter was broadly in line. Sales growth, at 18.7% (three-year CAGR: 17%), slightly exceeded expectations (+3% vs. HSIE). The decoration business recorded a volume/value growth of 8/21% (CAGR volume/value for the financial year 2019-22: 18/15% respectively). The growth was global (at all levels and at all price levels). Adjacencies continue to perform well. GM’s recovery is on track but still below expectations (38.7% vs. HSIE: 40.7%). Future price hikes are on an anvil but are likely to delay RM inflation as the elasticity of demand from now on could be tested. Brokerage firm cuts FY23/24 EPS estimates slightly by 3.6/2% to account for GM decline and keeps selling on APNT with DCF-based TP of INR 2,550/ sh (unchanged), which implies 53 x P/E of exercise 24.

Promoter/Fii Holdings
The promoters held 52.63% of the company’s capital as of March 31, 2022, while the FIIs held 19.45% and the DIIs 7.58%.

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