Asian Paints: Will it colour your portfolio green post Q4 results

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Brokerages have retained their bullish view on Asian Paints after it reported an 81.13% jump in its consolidated net profit to Rs 869.89 crore for the fourth quarter ended March 31, aided by volume growth in the domestic as well as in the international market.

The leading paint manufacturer had posted a net profit of Rs 480.25 crore during the January-March quarter of the previous fiscal.

Shares of the company traded 9.49% higher at Rs 2,798.80 at around 10.35 am (IST). On the other hand, the benchmark BSE Sensex was up 73 points, or 0.15%, at 48,764 at around the same time.

Its revenue from operations was up 43.49% at Rs 6,651.43 crore during the quarter under review as against Rs 4,635.59 crore in the corresponding period of the previous fiscal.

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Commenting on the results, brokerage UBS said, “Asian Paints’ home improvement business delivered double-digit growth in FY21, aided by the sequential uptick in demand from projects segment. Scale efficiencies and cost optimisation measures resulted in improved profitability.”

The brokerage has set a price target of Rs 3,350 for Asian Paints, indicating a further upside of nearly 20% from the current market price.

“Asian Paints is also aligning its home improvement business with its home décor business (furniture, lightings etc.) by collaborating with various stakeholders (architects, designers etc.). we continue to maintain a positive outlook for the home improvement segment and believe that the overall volume growth visibility remains robust for Asian Paints.

On the other hand, ICICI Securities continues to believe in the inherent strength of Asian Paints considering its 80 years old business legacy, strong balance sheet and its supply chain networks.

“This has not only helped the company to come out strongly from the lockdown disruptions but also register market share gains. We upgrade our recommendation from ‘Hold’ to ‘Buy’ with a revised target price of Rs 2,970 per share (earlier Rs 3,010),” ICICI Securities said.