HDFC Securities: Asian Paints - De-Facto King
Open tins of red paint pass along the production line at a paint and coatings factory. (Photographer Jasper Juinen/Bloomberg)

HDFC Securities: Asian Paints - De-Facto King

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

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.

Click on the attachment to read the full report:

HDFC Securities Asian Paints Initiating Coverage.pdf


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