Sharekhan has given Buy recommendation for Asian Paints with a target price of Rs. 3689 in its research report issued on Mar 17, 2022

Sharekhan’s research report on Asian Paints

Asian Paints Ltd’s (APL)’s stock price has recovered from recent lows with sharp correction in the crude oil prices from its highs of $130 per barrel. Yet, any further decline in the stock prices from the current levels due to persistent volatility in crude oil prices should be considered a good entry point for investment from a long-term perspective. We have reduced earnings estimates for FY2023/FY2024 by 7%/4% to factor in the near-term volatility in input prices and rural slowdown. Nevertheless, recent correction in crude oil prices would alleviate concerns on significant deterioration in profitability in FY23. Market share gains in core paint categories, scale-up of the home decor business and drivers such as rapid urbanisation, growth in home improvement projects and a recovery in the real estate cycle remains a key growth driver in the medium to long term.

Outlook

We reiterate our Buy rating on APL with a revised price target of Rs. 3,689. The stock is currently trading at 71.0x and 55.2x its FY2023E and FY2024E earnings.

More Info

At 16:01 hrs Asian Paints was quoting at Rs 3,045.75, down Rs 89.25, or 2.85 percent.

It has touched an intraday high of Rs 3,125.00 and an intraday low of Rs 3,032.25.

It was trading with volumes of 43,895 shares, compared to its thirty day average of 137,671 shares, a decrease of -68.12 percent.

In the previous trading session, the share closed up 3.07 percent or Rs 93.40 at Rs 3,135.00.

The share touched its 52-week high Rs 3,588.05 and 52-week low Rs 2,355.05 on 10 January, 2022 and 19 March, 2021, respectively.

Currently, it is trading 15.11 percent below its 52-week high and 29.33 percent above its 52-week low.

Market capitalisation stands at Rs 292,147.67 crore.

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