Prabhudas Lilladher has given Buy recommendation for Asian Paints with a target price of Rs. 3511 in its research report issued on Jul 22, 2021

Prabhudas Lilladher’s research report on Asian Paints

We are cutting FY22/F23 EPS by 7.7%/2.6% on near term input cost pressures although we remain positive on long term growth drivers. We expect APNT to sustain double digit volume growth led by 1) Market share gains from both organized and unorganized players due to strong focus on economy segment 2) rising innovation in Paints and coatings 3) Encouraging growth across waterproofing/ construction aids and extending presence in adhesives 4) strong penetration opportunity in small towns and rural India and 5) foray into designer tiles and home d├ęcor business allowing APNT to emerge as a complete home solution company.

Outlook

We retain long term Buy on the stock with DCF based target price of Rs3511 (Rs3136 earlier). We expect back ended returns given near term margin pressures and valuations at 61.5xFY23 EPS.

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