Asian Paints Ltd. share price target

Asian Paints delivered a robust Q3 with solid volume-led growth (up 24% YoY, Q2+Q3 combined volume growth at 16%+ YoY) aided by low base, festive timing shift and GST-cut led tailwinds.

Asian Paints recorded a stupendous performance with topline growth of ~24% YoY led by ~21% YoY (I-direct estimate) growth in volume. Strong festive demand coupled with aggressive price hikes (~6% YoY in May-December 2018) helped drive the topline in Q3FY19. The volume growth was led by lower end product categories (higher distemper sales in Q3FY9) resulting in lower realisation growth. According to the management, the price hike was insufficient to offset the higher raw material prices. As a result,...

Asian paints (APNT), is the market leader in the Indian paint manufacturing industry with a market share of ~53%. Robust volume (~21%) in decorative business supported the topline growth of 24% YoY in Q3FY19. However, EBITDA margin declined by 118bps YoY to 19.7% due to lag in price hikes and rise in overhead expenses for the new plant. Higher depreciation (29%YoY) and fall in other income (9%YoY) restrict earnings growth to 14% YoY. Volume growth is likely to stabilize at double digit due to fall in oil...

Depreciation rose 29% to Rs 115.36 crore. Profit before Tax (PBT) increased by 13% to Rs. For the quarter ended December 31, 2018, on consolidation of accounts of the subsidiaries and associates of Asian Paints - Revenue from operations has increased by 24% to Rs. 5,293.99 973.46 crores from Rs. 858.55 crores. Net Profit after non-controlling interest (from continuing...

22 January 2019 YoY to INR52.9b (est. INR48.1b) with a calculated volume growth of ~21% (est. 11.5%) in the Domestic Decorative paints business. EBITDA grew by 17% YoY to INR10.4b (est. INR8.7b), and adjusted PAT grew 14.1% YoY to INR6.5b (est.

We increase our FY19 and FY20 EPS by 6.9-6.7% as APNT has posted ~24% Change in Estimates | Target | Reco volume growth in domestic decorative business, first 20% growth number after 3QFY11. Although sustenance of the same is yet to be tested given...

Asian Paints surpassed expectations by delivering 26% domestic growth in Q3, indicative of 20%+ volume growth. Growth was partially supported by a delayed festive season and soft comparables, but it also signals demand pick-up and market share gains. Despite the strong sales performance, earnings grew only 15%, due to higher input inflation, overhead expenses toward the new plants, and higher ad spends and one-off staff expenses. Though input inflation has eased, we expect higher fixed costs relating to...

Asian Paints Ltd (APL) reported subdued numbers for Q2FY19, below our expectation. Its revenue grew by 8.5% yoy driven by volume growth across various products. Its EBITDA and PAT de-grew by 2% and 3.8% yoy respectively on back of higher input costs and higher interest expense. Further, both EBITDA and PAT margins declined by 184 bps and 140 bps yoy.

We move Asian Paints to BUY from HOLD as we now find valuation to be in a reasonable zone after two years of near-zero return. The stock price has swung from its 52-week high of INR1,467 on the day of its 1QFY19 result to near-52-week low level post a 5% fall today in possibly a reaction to a weak 2QFY19 earnings report, due in part to some once-off factors that impacted the quarter's profitability. We are quite confident, though, that margin performance going forward will be much better vs 2QFY19's, given elements of constraint (deferral of price-hike to avoid attracting anti-profiteering provisions) and once-off rebating (on transition stocks at the time of GST rate cut) present in the latter - issues that are unlikely...