Buy Asian Paints, target price Rs 3260: Anand Rathi

Anand Rathi has buy call on Asian Paints with a target price of Rs 3260. The current market price of Asian Paints is Rs 2853.

Asian Paints, incorporated in the year 1945, is a Large Cap company (having a market cap of Rs 271774.31 Crore) operating in Building Materials sector.

Asian Paints key Products/Revenue Segments include Paints, Enamels, Varnishes & Black, Other Operating Revenue and Sale of services for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 8723.30 Crore, up 1.99 % from last quarter Total Income of Rs 8553.04 Crore and up 1.44 % from last year same quarter Total Income of Rs 8599.05 Crore. Company has reported net profit after tax of Rs 1061.41 Crore in latest quarter.

The company’s top management includes Mr.Deepak Satwalekar, Mrs.Vibha Paul Rishi, Mr.R Seshasayee, Mrs.Pallavi Shroff, Mr.Suresh Narayanan, Ms.Nehal Vakil, Mr.Jigish Choksi, Ms.Amrita Vakil, Mr.Malav Dani, Mr.Ashwin Dani, Mr.Amit Syngle, Mr.Manish Choksi, Mr.Milind Sarwate. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-12-2022, the company has a total of 96 Crore shares outstanding.

Investment Rationale
The brokerage expects Asian Paints’ demand to rise, vs. weak Q3 volumes. Lower input prices would help margins expand from Q4. While the brokerage lowers its FY23e/24e/FY25e8%/6%/6% to factor in weak Q3 volumes and higher capex, it is optimistic of its earnings (~17% CAGR) over FY23-25.

Promoter/FII Holdings
Promoters held 52.63 per cent stake in the company as of 31-Dec-2022, while FIIs owned 18.11 per cent, DIIs 9.07 per cent.