ASIANPAINT - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.8

📊 Core Financials Analysis

Profitability

ROE of 20.7% and ROCE of 27.3% are strong, reflecting efficient capital deployment.

EPS of ₹36.5 is solid, but quarterly PAT dipped by 7.53%, indicating margin pressure.

Leverage & Cash Flow

Debt-to-equity ratio of 0.06 — virtually debt-free, a major strength.

Dividend yield of 1.00% is modest, typical for a growth-oriented company.

Growth

Despite a quarterly profit dip, YoY growth remains intact. However, rising input costs and competition are squeezing margins

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📉 Valuation Metrics

Metric Value Commentary

P/E Ratio 63.2 Significantly above industry average (48.7) — overvalued

P/B Ratio ~12.5 High premium to book value ₹198

PEG Ratio 8.93 Extremely high — suggests poor value for growth

Intrinsic Value ₹1,900–2,100 Current price exceeds fair value estimate

🏢 Business Model & Competitive Edge

Sector Leadership: Asian Paints dominates the decorative paints segment, holding over 50% market share.

Moat: Strong brand, vast dealer network, and integrated supply chain.

Challenges: Rising competition from Birla Opus and JSW Paints is intensifying dealer push and pricing pressure

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Institutional Sentiment: DII holdings rose sharply (+5.47%), while FII holdings declined (-0.38%) — mixed signals.

📈 Technical & Entry Guidance

Current Price: ₹2,478 — aligned with 50 DMA and 200 DMA, indicating consolidation.

RSI: 44.3 — neutral zone, no strong momentum.

MACD: Positive at 5.34 — mild bullish signal.

Entry Zone: ₹2,100–2,250 offers better value and downside protection.

🕰️ Long-Term Holding Outlook

Strengths: Market leadership, brand equity, low debt, and consistent profitability.

Risks: Elevated valuation, competitive threats, and margin compression.

Recommendation: Hold if already invested. New investors should wait for a dip near ₹2,200 before accumulating. Long-term outlook remains positive, especially with urbanization and repaint cycles driving demand.

If you'd like, I can break down its international expansion strategy or compare it with Berger Paints.

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tradebrains.in

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www.cnbctv18.com

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