INSUBCONTINENT EXCLUSIVE:
Brokerages have retained their bullish view on Asian Paints following its December quarter result, which saw the company surprising the
Street on the volume growth front which grew in double digits
Target prices have been revised up by 7-34 per cent, with many brokerages rolling forward valuations.
Asian Paints on Tuesday posted a 14.6
per cent increase in consolidated profit from the year ago level at Rs 635.6 crore
Consolidated revenue increased 24 per cent to Rs 5,293.99 crore.
Shares of Asian Paints ended down 0.7 per cent at Rs 1,397.10 after gaining
as much as 1.7 per cent intraday
The stock has gained 22.7 per cent in the last three months.
Macquarie, which revised up target price the most among brokerages, also
upgraded the stock to 'outperform' from 'neutral'.
Citigroup, Credit Suisse, Jefferies, Kotak Institutional Equities, and Morgan Stanley
revised target price higher by 7-25 per cent
CLSA retained the ‘outperform’ rating with a target price of Rs 1,565
Both Jefferies and HSBC retained ‘buy’ ratings and target price at Rs 1,600.
“Asian Paints reported one of the strongest quarters in
eight years with volume growth of 20 per cent YoY, much above our and consensus estimate of 14 per cent," said Deutsche Bank.
“Although
APNT’s (Asian Paints) robust volume growth of 20 per cent in 3QFY19 was largely driven by festive sales, its four-quarter moving average
volume increased to 13 per cent YoY, much above the industry growth of 10 per cent YoY,” the bank added.
Morgan Stanley said price hikes
and the benign input cost environment increase the visibility of over 20 per cent earnings growth for FY20-FY21.
Some brokerages such as
Citi, Kotak Institutional and Credit Suisse have increased target prices but retained ‘neutral’ or ‘reduce’ rating
“We believe medium-term upsides are well reflected in stock valuations, particularly post the run-up in the last 3 months," said
