Sell Asian Paints, target price Rs 2,240: Anand Rathi

Anand Rathi has a sell call on Asian Paints with a target price of Rs 2240. The current market price of Asian Paints Ltd. is Rs 2246.1. Asian Paints, incorporated in 1945, is a Large Cap company with a market cap of Rs 215833.89 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-2024.

Financials

For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 8692.44 crore, up 5.99% from last quarter Total Income of Rs 8201.09 crore and down -5.94 % from last year same quarter Total Income of Rs 9241.67 crore. The company has reported net profit after tax of Rs 1078.61 crore in latest quarter.

The company's top management includes Mr.R Seshasayee, Mr.Soumitra Bhattacharya, Ms.Ireena Vittal, Mr.Milind Sarwate, Ms.Nehal Vakil, Mr.Jigish Choksi, Ms.Amrita Vakil, Mr.Malav Dani, Mr.Amit Syngle, Mr.Manish Choksi, Dr.Gopichand Katragadda. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-12-2024, the company has a total of 96 Crore shares outstanding.

Investment Rationale
Asian Paints lost more than 350bp market share to Birla Opus. Anand Rathi's interactions and analysis of 9M FY25 performances suggest that the new entrant, Birla Opus, gained 350bp+ market share, a large part of which was lost by Asian Paints; Also, Asian Paints saw the biggest gross and EBITDA margin loss among peers, amid negative operating leverage. They maintain Sell ratings on Asian Paints with a target price of Rs 2,240.

Promoter/FII Holdings
Promoters held 52.63 per cent stake in the company as of 31-Dec-2024, while FIIs owned 13.61 per cent, DIIs 13.98 per cent.