Asian Paints Gets 'Add' Upgrade From Dolat Capital Post Q1 Results — Check Target Price
Asian Paints Q1 Results Review: Motilal Oswal believes that the volume growth would improve here on which would be reflected in the valuations going ahead.
In the short run, Asian Paints expects single-digit value and volume growth. The brokerage believe a double- digit growth can be achieved in the long run, led by industry growth, strong leadership, planned capacity addition over four-five years and favorable base. However, elevated competition remains a concern.
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Dolat Capital Report
Asian Paints Ltd.’s Q1 FY26 results were ahead of our estimates. Consolidated revenue de-grew by 0.3%, while decorative segment posted volume growth of mere 3.9%, with revenue declined by 1.2%. The performance was impacted due to subdued demand conditions as per result of marco-economic uncertainties and early monsoon, along with unfavorable product mix shifts.
In the short run, Asian Paints expects single-digit value and volume growth.
We believe a double- digit growth can be achieved in the long run, led by-
industry growth,
strong leadership,
planned capacity addition over four-five years and
favorable base.
However, elevated competition remains a concern.
Though Q1 performance was ahead, we have maintained our FY26/27E EPS estimates at Rs 48.3/54.6 as we already factored in recovery. Valuing the stock at 48x FY27E EPS, we have arrived at a target price of Rs 2,648 (Rs 2,475 earlier).
We believe that the volume growth would improve here on which would be reflected in the valuations going ahead. Thereby, we have increased valuation from 45x earlier to 48x FY27E.
Upgrade to ‘Accumulate’ rating from Reduce.
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