HDFC Securities: Asian Paints - De-Facto King
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HDFC Securities Report
Asian Paints Ltd. (52/64% revenue/profit after tax share) with 2.5-7 times active dealers than the next three paint companies remains de-facto king in distribution/supply chain of paints in India.
Coupled with better price laddering of products across categories/price points, this has ensured its unhindered dominance over decades.
Promising optionality in waterproofing/other adjacent categories (we build in 40-50 basis point incremental growth from waterproofing) could surprise on the upside.
We build in Sales/Ebitda/profit after tax compound annual growth rate of 8/9/10% over FY20-23E.
Alas! all pluses seem priced-in at 55 times September 2022 price to earning.
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