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Research
Asian Paints - Technical View / Fundamental View - ICICI Securities
Posted On : 2020-06-25 12:14:36( TIMEZONE : IST )
Technical View
The share price logged a resolute breakout from symmetrical triangle pattern, indicating conclusion of secondary corrective phase, that augurs well for acceleration of upward momentum. Thereby offering fresh entry opportunity to ride next leg of major up move.
The stock has been trading in a secular up trend. Key point to highlight over past four years is that, on multiple occasions buying demand emerged in the vicinity of 52 weeks EMA coincided with long term upward sloping trend line. In current scenario, stock resolved out of symmetrical triangle after staging strong comeback from long term trend line coincided with 52 weeks EMA, indicating rejuvenated upward momentum.
Fundamental View
Asian Paints is India's leading paint company and ranked among the top ten Decorative coatings companies in the world with a consolidated turnover of ~Rs. 20,000 crores. It has recently forayed into the hand sanitizer category with the launch of the Viroprotek range of Hand and Surface Sanitizers. Asian Paints along with its subsidiaries have operations in 15 countries across the world with 26 paint manufacturing facilities, servicing consumers in over 60 countries through Asian Paints Berger, SCIB Paints - Egypt, Apco Coatings, Taubmans, Kadisco and Causeway. Asian Paints is also present in the Home Improvement and Décor space in India through Sleek (Kitchens) and Ess Ess (Bath Fittings).
The consistent growth in the decorative segment would be supported by 1) strong demand from tier II, tier III cities and rural India, 2) market share gain in bottom of the pyramid products and 3) launch of new products in the economy range. We believe company would partially pass on the benefit of recent fall in raw material prices (crude decline by ~50% from its peak) and register expansion in gross margin.
Shares of ASIAN PAINTS LTD. was last trading in BSE at Rs.1748 as compared to the previous close of Rs. 1683.65. The total number of shares traded during the day was 297632 in over 21980 trades.
The stock hit an intraday high of Rs. 1813.1 and intraday low of 1686.2. The net turnover during the day was Rs. 526472347.
