Asian Paints, Godrej Properties, Eris Lifesciences, Kajaria, KEC International Q3 Review - HDFC Securities

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HDFC Securities Report

Asian Paints - Urban slowdown and weak festive season impact demand

Asian Paints Ltd.’s consolidated revenue declined 6.1% YoY to Rs 85.5 billion (our estimate: Rs 89 billion). The decorative and industrial business collectively clocked 1.7% volume growth and 6.6% decline in value growth in Q3 (decorative value/value growth came in at 1.6/-7.8%).

Muted consumer demand (especially in the urban centers) coupled with downtrading and a weak festive season impacted revenue. International business grew by 5% YoY. Ebitdam contracted 344 bps to 19.1% (in-line). Amidst a slowdown in the decorative business, management is focusing on scaling the industrial business. It expects good monsoon/likely boost in government spending to support rural demand.

We’ve cut our FY26/27 EPS estimates by 6/5% to account for lower volume growth and maintain our Add rating with a DCF-based target price of Rs 2,450/share; implying 44x FY27E P/E.

Godrej Properties - On track to exceed guidance

Godrej Properties Ltd. reported presales of Rs 54.5 billion (-5/+5% YoY/QoQ), with a booking area of 4.1msf (-6%/-21% YoY/QoQ). For 9M FY25/Q3 FY25 new launches contributed 70/58% to presales. Godrej Properties needs to deliver Rs 77 billion of presales in Q4 FY25 to achieve FY25 presales guidance of Rs 270 billion. We expect Rs 100 billion of new launches in Q4 FY25 and this shall help exceed the guidance. Godrej Properties added four new projects with a gross development value of Rs 108 billion in Q3 FY25, (achieving 117% of targeted guidance for FY25).

Godrej Properties has growth visibility of two-three years and sees a huge demand from its core markets namely NCR, MMR and Bengaluru. Moreover, Godrej Properties’ recent fundraise of Rs 60 billion will help achieve a growth run-rate of >20% by adding new business developments and deploying a substantial portion in MMR which would eventually aid margin uptick.

Given robust presales outperformance, new launches (like Worli, Golf Course road, Sector 44, etc) and strong underlying demand, we believe that Godrej Properties is all set to outperform guidance. We maintain our Add rating on Godrej Properties with SOTP based target price to Rs 2,846/share (post dilution).

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