Asian Paints Ltd. share price target

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...

Asian Paints (APL) posted a good set of numbers amid a challenging demand environment due to demonetisation. Sales growth at 3% YoY (vs. I-direct estimate: -13%) was driven by volume growth of ~4% YoY due to 1) launch of various trade schemes in November December 2016 2) change in product mix. The domestic business recorded flattish sales growth of 0.8% YoY while the overseas subsidiary recorded sales growth of ~13% YoY to | 719 crore. Further, demand of industrial paint (automotive and powder coating)...

Core Moats Remain Intact despite Near-term Overhang Asian Paints (APNT) has delivered flattish performance in 3QFY17 with its consolidated net sales and PAT growing 2.8% & 1.5% to Rs38.9bn & Rs4.9bn, respectively while EBITDA remained flat at Rs7.3bn. Owing to demonetisation the decorative business in India reported low single-digit growth in 3QFY17. Following modest performance in 3QFY17, we have downwardly revised our earnings estimates by 5% and expect...

With 1.2 billion people and the world's fourth-largest economy, India's recent growth and development has been one of the most significant achievements of our times. Over the six and half decades since independence, our motherland has brought about a landmark agricultural revolution that has transformed the nation from severe dependence on grain imports into a global agricultural powerhouse supplying food worldwide through its positive net exports. Life expectancy rates have more than doubled, literacy rates have quadrupled, with improving health conditions a sizable middle class has emerged. India is now home to globally recognized companies in pharmaceuticals,chemicals , steel and...

Asian Paints (APL) posted sales growth of 10.3% YoY driven by volume growth of ~10% YoY led by both decorative and industrial paint demand strong demand from tier II and tier III cities. We believe realisation has declined 1.8% YoY mainly because 1) the company...

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...

Gross margins rose by 180bps yoy to 43.9%. While average prices of crude oil were lower by 10% in 2QFY17, the prices of Titanium Dioxide (TiO2) remained stable. The management stated that as the raw material prices have inched up sequentially, it might have to hike prices, in case the cost of inputs continues to inflate further. Consolidated...

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...

Asian Paints (APL) posted sales growth of ~10% YoY driven by strong domestic and international performance. It reported strong volume growth of ~12% supported by strong demand from tier II and tier III cities. We believe realisation has declined ~2% YoY mainly because 1) the company has passed on the benefit of lower raw material prices and 2) a change in the product mix Raw material prices as a percent of sales declined 457 bps YoY due to benign raw material prices while other expenses increased 130...

In spite of ~3% correction in the paint prices, gross margins improved by 450bps to 46.5% in 1QFY17. While employee cost rose by 50bps to 7.7% of sales, other expenses also increased by 180bps to 17.3% mainly on account of higher advertising spends. The...