IIFL has buy on Asian Paints, target price Rs 1,850

IIFL has a buy rating on Asian Paints in the long term with a target price of Rs 1,850. Shares of Asian Paints ended up 0.3% at Rs 1778.45 on Thursday while the BSE Sensex closed 297.55 points down at 37,880.40.

Company Financials

For the quarter ended 30-06-2019, the company has reported a Consolidated sales of Rs 5130.63 crore, up 2.24% from last quarter sales of Rs 5018.21 crore and up 16.86 % from last year same quarter sales of Rs 4390.27 crore. The company has reported net profit after tax of Rs 659.90 crore in latest quarter.


Investment Rationale

The brokerage expects Asian Paints' Ebitda CAGR over FY19-FY22 aided by its moats, GST reductionled market share gains, benign input costs and moderating competitive intensity. This along with reducing capex intensity and recent reduction in corporate taxes should move the RoIC closer to the 45% levels seen in FY15, said IIFL.