Fwd: Asian Paints Q2FY12 Result Update; Mean Reversion, Maintain HOLD; Target: Rs 2,820

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Deepak Vaishnav

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Oct 29, 2011, 3:20:01 AM10/29/11
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Asian Paints

Mean Reversion, Maintain HOLD

 

HOLD

 

CMP: Rs 3,015                                       Target Price: Rs 2,820

n     Asian Paints’ (APL) revenue increased 24% yoy to Rs 22.5 bn. Ebidta margins at 14.3% and APAT of Rs 2.1 bn decline of 3% yoy is much below our expectations

n     Domestic volume growth in decorative paints reported a weak quarter at 10% vs our expectation of 12%.  Industrial coatings continued its subdued demand performance

n     Continued increase in titanium dioxide prices, coupled with higher operating costs resulted in a sharp decline of 400 bps in EBITDA margins  to  14.3%

n     Lowered FY12E/13E EPS by -2%/-3% to Rs 101.4 and Rs 117.5, respectively. Absence of upgrade catalysts to weigh on stock - Re-iterate Hold with revised TP of Rs 2,820/share

 

Regards,

Pritesh Chheda

Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email: pritesh...@emkayglobal.com 

Board No. : +91- 22- 6612 1212 | Extn. : 273 | DID : +91-22- 6612 1273 | Mob : +91 98208 07241

 

 

Sweta Jain

Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : sweta...@emkayglobal.com 

Board No. : +91-22-6612 1212 | Extn. : 479 | DID : 6624 2479 | Mob : +9198923 17596 |

 


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Asian Paints Q2FY12 Result Update.pdf
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