Asian Paints Ltd.

NSE: ASIANPAINT | BSE: 500820 | ISIN: INE021A01026 |Industry: Furniture-Furnishing-Paints
|Expensive Star
2211.50 -13.95 (-0.63%)
NSE Oct 30, 2020 15:31 PM
Volume: 3.0M

Asian Paints Ltd.    
07 Sep 2020
HDFC Securities
We build in Sales/EBITDA/PAT CAGR of 8/9/10% over FY20-23E. Alas! all pluses seem priced-in at 55x Sept-22 P/E. We initiate coverage with a Reduce Reco and DCF-based TP of Rs. 1,800/sh (implying 50x Sep-22 P/E). Asian Paints (52/64% revenue/PAT share) with 2.5-7x active dealers than the next three paint companies remains de-facto king in distribution/supply chain of paints in India. Coupled with better price laddering of products across categories/price points, this has ensured its unhindered dominance over decades. Promising optionality in waterproofing/other adjacent categories (we build in 40-50bp incremental growth from waterproofing) could surprise on the upside.
Number of FIIs/FPIs holding stock rose by 7 to 1118 in Sep 2020 qtr.
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