Asian Paints Ltd. share price target

Revenue fell by 2.38% to Rs. 3815.22 Cr in Q1FY18 when compared to the previous quarter. Revenue fell by 2.38% to Rs. 3815.22 Cr in Q1FY18 when compared to the previous quarter.

Asian Paints (APL) recorded muted volume growth of ~2% YoY in Q1FY18 due to a sharp decline in primary sales in May 2017 and June 2017. This was on account of de-stocking of inventory at dealer level before implementation of GST. Additionally, the company has taken price hike of ~3% YoY to partly offset the higher raw material cost. Further, industrial paint demand (automotive, powder coating) stayed intact in the auto OEM and industrial liquid paint segment APL recorded ~450 bps decline in gross margin due to an increase in...

Asian Paints Ltd.'s net profit missed estimates on lower volume growth as distributors cut stock ahead of the Goods and Services Tax. Asian Paints revenue from Operations increased 4.9% to Rs 4228.26 crore in Q1FY18 from Rs 4,031.70 crore in Q1FY17. Profit before depreciation, interest, tax and other income (PBDIT) for the group decreased by 18.5% to Rs 665.37 crore from Rs 816.16 crore. Profit Before Tax (PBT) decreased by 19.1 % to Rs 645.23 crore from Rs 797.34 crore. Net Profit after Minority Interest decreased 20.1 % to Rs...

Revenues in Line; Higher Cost Impairs Profitability Asian Paints has reported a mixed set of numbers for 1QFY18. While its consolidated net sales grew by 6.4% YoY to Rs38.2bn in line with our estimates, EBITDA and net profit came in sharply below our estimates. While EBITDA fell by 18.5% YoY to Rs6.7bn vs. our estimate of Rs8.1bn, net profit decreased by 20.4% YoY to Rs4.4bn vs. our estimate of Rs5.7bn. Considering the sharp fall in earnings, we have revised our net profit estimate downwards by 10% for FY18E and 7% for FY19E and now we expect the Company to post revenue and earnings CAGR of 14.2% and 12.6% through FY17-19E. Considering the rich valuations at 43.1x FY19E earnings...

Revenue grew by 0.39% to Rs. 3952.45 Cr in Q4FY17 when compared to the previous quarter

Post demonetisation, Asian Paints (APL) recorded strong volume growth of ~11% YoY in Q4FY17 supported by a recovery in demand from tier II and tier III cities. However, the realisation remains muted due to a change in the product mix and some trade discounts in January. Further, industrial paint demand (automotive, powder coating) stayed intact from auto OEM, industrial liquid paint segment APL recorded ~80 bps decline in gross margin due to rising raw material prices in the last two quarters. To offset the rising raw...

Background: Asian Paints is the largest paint company in India with a market share of 50% within organised players and ranks among the top 10 decorative coating companies globally. It operates in 17 countries with 24 manufacturing facilities. Further, through subsidiaries - Berger International Limited, Apco Coatings, SCIB Paints and Taubmans it is also present in the international markets. Domestic operations however account for a predominant share of its profits. Asian Paints has ~28,000 dealers...

Growth Trajectory Impressive but Valuations Limit Upside Asian Paints reported a mixed set of numbers for 4QFY17. While its consolidated revenues grew by 7.8% YoY to Rs39.5bn, EBITDA grew by a modest 2.1% YoY to Rs7.1bn. Consolidated net profit increased 10.1% YoY to Rs4.8bn on the back of higher other income. Volume growth in the decorative business stood at an impressive ~11% during the quarter. We expect Asian Paints to deliver 15.7% and 16.6% CAGR in revenue and earnings, respectively through FY17-19E. However, based on expected EPS of Rs28.6, the stock currently trades at expensive valuations of 40.8x FY19E earnings. Post our rating upgrade in 3QFY17, the stock has...

Revenue rose by 4.52% to Rs. 3888.73 Cr in Q3FY17 when compared to the previous quarter. Also, it increased by 2.76% when compared with Q3FY16