Religare Retail Research report on Asian Paints
Asian paints reported consolidated revenue of Rs 9,182.3cr, higher by 6.7% YoY and 4.5% QoQ led by double digit volume growth of 10% in decorative segment. Volume growth of 10% in Q1FY24 was on and above the double digit growth in Q1FY23 which was 37% while in Q4FY23 it was 16%. Further urban and rural both grew in double digit and demand is picking up in rural.
Outlook
On a financial front, revenue is expected to grow at 18% CAGR over FY23-25E and have increased margin estimated by 1-2% for FY24E & FY25E on the back of easing prices and operating efficiency which translate EBITDA/PAT to grow at 27.8%/30.8% CAGR over FY23-25E Consequently, our target price is revised upwards to Rs 3,939 (assigned a P/E of 53x i.e. its 10 years average) and have maintained a Buy rating.
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