Asian Paints Ltd - Result Update - REDUCE - TP Rs.1230 - Kotak

High single digit volume growth in the decorative paint segment on the back of near normal monsoon, onset of festive season from October and latent demand post GST implantation, satisfactory performance in the industrial segment, but weak performance in the automotive paint segment were the highlight of the quarter. Bangladesh, Nepal and Middle East contributed to good performance of international operations. While there was sequential improvement in performance of the home improvement segment in the quarter. Consequently, revenue was reported at Rs 42.65 bn (+13.3% YoY and + 11.8% QoQ). Though raw material prices were benign, the increasing RM price trend is a cause of concern. We interpret the numbers as moderate for the company, with the company reporting adjusted PAT of Rs 5.27 bn. We maintain our estimates and now value the stock at 46x FY19E (premium to mid-size paint companies) and maintain REDUCE with an TP of Rs 1230 (from Rs 1175) for the stock, primarily due to stretched valuations.

Shares of ASIAN PAINTS LTD. was last trading in BSE at Rs.1189.1 as compared to the previous close of Rs. 1191. The total number of shares traded during the day was 32271 in over 1970 trades.

The stock hit an intraday high of Rs. 1212 and intraday low of 1180.1. The net turnover during the day was Rs. 38299991.

Source : Equity Bulls

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