Motilal Oswal's research report on Asian Paints
Demand has been fairly resilient, with 8% volume growth in 4QFY22, despite a cumulative price increase of ~20% in FY22. In Tier I and II cities, the price rise has been absorbed, but there has been some impact on demand in smaller cities. The impact of raw material inflation in 4QFY22 was lower than our estimate. However, the management said APNT is witnessing a 5-7% sequential increase in its raw material basket against which it is taking a 2% price increase in May'22 and Jun'22.
Outlook
The current valuations of ~54.4x FY24E PE fully capture the upside over the next one-year. We maintain our Neutral rating.
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