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Asian Paints' Q1 Shines Bright; Systematix Raises Target Price — What's Driving the Bullish Call?

The brokerage highlighted that Asian Paints' strong volume growth performance for a fourth straight quarter cements an upward shift in the trajectory; nevertheless, it factors in near-term volume growth at the lower end of the guided range in view of the base now turning high.

Asian Paints' Q1 Shines Bright; Systematix Raises Target Price — What's Driving the Bullish Call?
Q1 gross, operating margins expanded 90bps, 240bps YoY to 43.6%/ 20.6%, the highest OPM in 10 quarters , since launch of Grasim's paints business.
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STOCKS IN THIS STORY
Asian Paints Ltd.
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NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Systematix Report

Asian Paints Ltd. remained in focus after brokerage firm Systematix retained its 'Buy' rating on the stock and raised its target price to Rs 3,285 from Rs 3,105 following a stronger-than-expected performance in the June quarter.

The revised target implies an upside potential of nearly 19% from the current market price of Rs 2,761.   

The brokerage highlighted that Asian Paints' strong volume growth performance for a fourth straight quarter cements an upward shift in the trajectory; nevertheless, it factors in near-term volume growth at the lower end of the guided range in view of the base now turning high.

Volume resilience despite cumulative price hikes of 13-14% also attest to Asian Paints's robust pricing power and brand equity as the market leader.

Adding another layer to growth is the now-positive mix. While volume growth is monitorable, Systematix believe the trajectory remains firm, and the industry's structural demand elasticity (home maintenance an imperative) would result in FY27E volumes growing +8% YoY.

ALSO READ: Indegene Shares In Focus As IDBI Capital Initiates Coverage — Check Target Price, Upside And More

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Systematix Asian Paints.pdf
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