Buy Asian Paints; target of Rs 2475: Sharekhan

Sharekhan's research repor on Asian Paints

Asian Paints Limited (APL) registered healthy performance. Revenue grew by 6%; OPM improving by 474 bps to 23.6% and strong growth of 36% at PBT level. Volume growth in the domestic decorative business stood at 11%, ahead of our and street expectation of 7%-8%. The stock is currently trading at 59.2x/49.3x its FY2022/23E EPS. Leadership position in the domestic decorative paint industry, sturdy balance sheet, and good dividend pay-out will keep valuations at premium level. We have fine-tuned our earnings estimates to factor better-than-expected performance.

Outlook

We retain our Buy recommendation with a revised PT of Rs. 2,475.

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