Asian paints (APNT), is the market leader in the Indian paint manufacturing industry with a market share of ~53%. Decorative business recorded 33% volume growth supported by festival demand and growth in Tier 2 to 4 cities, while Q3FY21 revenue grew by 25% YoY. EBITDA margin improved by 439bps YoY to 26.3% due to...

Grasim's Entry unlikely to shake paint majors Grasim Industries is entering decorative paints Industry with initial capex of Rs 50bn (FY22-24) with an aim to emerge as No2 player by leveraging Birla Asian Paints (APNT IN) Consolidated...

APNT's 3QFY21 consolidated revenue grew by 25.2% YoY to Rs67.9bn (vs our est. 16.5% growth to Rs63.1bn). Demand conditions continued to exhibit a strong recovery across business segments, spread over most regions. Domestic Decorative business delivered 33% YoY volume growth (vs our est. 20% growth), supported by robust festive/marriage season demand, strong performance in tier 1 markets & metros, supporting rural growth, uptrend seen across manufacturing as well as construction sectors, pent-up demand and market share gains. The volume in the international business also picked up strongly in the quarter. The Industrial Coatings business also delivered a robust performance, particularly in protective coatings and auto/OEM businesses, which rebounded in...

We downgrade the stock to HOLD from BUY earlier as we await better entry points and get constructive again. Our revised TP is Rs. 2,664 (Rs. 2,300 earlier) as we value the stock at 55x its FY23E EPS. Key risks to our estimates

compared to corresponding previous year period. The company operating margins rose 440 bps to 26.3%. As a result operating profit was up 50% to Rs 1787.89 crore. Other income of the company rose 40% to Rs 97.92 crore. Interest cost decreased 12% to Rs 21.13 crore. Depreciation decreased 2% to Rs 193.17 crore. PBT as a result rose 61% to Rs 1671.51 crore. The effective tax rate fell to 25.8% compared to 26.7% owing to which the...

APL's decorative segment volume growth remained robust at ~33% YoY in Q3FY21 (11% in Q2FY21) was led by strong pent up demand post opening up of metro regions. The festive & marriage seasons aided in the volume growth during Q3. However, lower realisation is attributable to product mix (skewed towards economy products categories). For 9MFY21, sales recovery was ~97% (led by strong recovery in the decorative volume growth) to | 15,061 crore while absolute EBITDA and PAT at | 3538 crore and | 2336 crore were up by 7% and 2% YoY respectively. While demand...

Highest ever EBITDA margins on back of favorable sales mix, higher gross margins, cost optimization measures and innovative sourcing measures We are increasing FY22 and F23 EPS by 10.9% and 7.6% and assign Hold rating on the back of robust growth outlook driven by 1) Increase in domestic decorative volume by 33% 2) Revival in consumer sentiment and pickup in housing construction activity 3) improved mix in tier1/2 cities and 4) pick up in International, auto and industrial coating business. We believe 4Q21 and...

Asian Paints reported revenue growth of 5.9% YoY / 83.1% QoQ to INR 5,350 Cr above our estimate of INR 4,203. Overall, EBITDA margin improved 474 bps YoY to 23.6% ( +708 bps QoQ) on the back of soft raw material prices, better product mix, favorable foreign currency and cost optimization measures undertaken over the period. Net Profit increased by 1.2% YoY to INR 830 Cr (+280.1% QoQ) with NPM of 15.5% (-72 bps YoY) due to the lower total tax. Board has recommended payment of interim dividend of INR 3.35 per equity share of the face value of INR 1 each for FY21; as on...

We recommend a BUY on ASIAN PAINTS with a Target Price of Rs. 2262 an upside of 7% from CMP of Rs. 2114 and Stop Loss Rs. 2040.

We thus upgrade our estimates for FY21/22 and introduce FY23E. Revise rating to BUY (HOLD earlier) and a TP of Rs. 2,300 (Rs. 1,796 earlier) as we roll forward to Sept-22E EPS (50x target PE multiple).

The stock is currently trading at 59.2x/49.3x its FY2022/23E EPS. Leadership position in the domestic decorative paint industry, sturdy balance sheet, and good dividend pay-out will keep valuations at premium level. We have fine-tuned our earnings estimates to factor better-than-expected...

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.

Pick up in demand, a positive surprise... Asian paints (APNT), is the market leader in the Indian paint manufacturing industry with a market share of ~53%. Q1FY21 revenue declined by 43% YoY, decorative business recovered to 80% to pre Covid levels in May while double digit volume registered in June month are positive. Management expects volumes to improve in coming quarters...

Q1FY21 performance beat our estimates on topline and profitability driven by a robust pace of recovery in volumes (Q1 volumes declined 35% vs our/street estimates of -45%/over 50% decline). Volumes in June grew at healthy 14% led by fresh homes and repainting as May witnessed recovery from pent-up