Asian Paints Ltd. share price target

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

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...

Asian Paints (APNT) reported above expected result driven by 33% volume growth in decorative coatings followed by double digit revenue growth in both home improvement business and international market. Festive demand and resurgence of construction activity has contributed towards strong revenue growth. Deflationary raw material cost supported 7th consecutive quarter of gross margin expansion. Foray into Home Dcor is tracking well. APNT guides to double the count of stores which are offering Home Dcor solution in next 2 years. Based on revised business outlook, we have revised our EPS estimates upwards for FY21E by 6%. We estimate Rs 2,461 as fair price for APNT...

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...

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).

Asian Paints (APNT) above expectation result was driven by 11% volume growth in decorative coatings followed by meaningful recovery in home improvement (led by kitchen business). In International markets, except Nepal, all other regions witnessed strong volume growth supported by gradual unlocking of the markets. Stable input cost aided gross margin expansion. APNT forays into lighting, furnishing and furniture to strengthen its home dcor and interior design business. Overall, it has been a strong performance. APNT has gained market share both from organized and un-organized players led by distribution reach/efficiency. We continue to maintain our bullish stance...

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.