Asian Paints - Standard Chartered Securities

Asian Paints Limited (APL) (OUTPERFORM): 3QFY12: Superlative performance in a challenging environment:

- Results for Asian Paints Limited (APL) were above street expectations - net sales, EBITDA & PAT grew 22%, 15% & 17%, respectively.

- Decorative segment volume growth at ~12%, despite economic uncertainty and a high base of 25-30%.

- Standalone EBITDA margins improve (up 190bps qoq) to 17.2%. Int'l & industrial margins remain under pressure.

- Management commentary positive - Demand growth in decorative healthy across markets and stabilisation seen in input costs (change in stance after many quarters).

- At one-year forward P/E of 24x, valuations are reasonable. Maintain it as our top-pick with a price target of Rs. 3,344.

Source : Equity Bulls

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