ASIANPAINT - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.6

Here’s a crisp evaluation of Asian Paints Ltd. (ASIANPAINT) — a leader in the decorative paints space, offering consistency in returns and strong brand equity, though grappling with rich valuation multiples and soft short-term profitability.

🧾 Core Financials Overview

Profitability & Returns

EPS: ₹37.5, ROE: 20.6%, ROCE: 25.7% — strong margin-led returns; above average in manufacturing.

PAT Qtr Decline: -6.0% — suggests possible margin pressure or seasonal softness.

Debt-to-Equity: 0.12 — extremely low leverage; balance sheet health is excellent.

Dividend Yield: 1.03% — modest but stable returns for long-term shareholders.

📊 Valuation Matrix

Metric Value Commentary

P/E Ratio 59.9 ⚠️ Elevated vs Industry PE: 45.4 — signals overvaluation

P/B Ratio ~11.9 Rich compared to Book Value ₹202

PEG Ratio 7.13 🚩 Suggests price running far ahead of earnings growth

Intrinsic Value Slightly Below CMP Price may be stretched unless growth accelerates

🎨 Business Model & Competitive Advantage

Market dominance in decorative paints, waterproofing, and home solutions.

Massive dealer network, deep brand recall, and aggressive push into adjacencies like adhesives & coatings.

Competitive moat includes scale, marketing strength, and dealer loyalty.

Institutional Tone

FII Hold ↓ -0.38% — mild foreign trimming

DII Hold ↑ +5.47% — domestic conviction strengthening

📉 Technical Snapshot

RSI: 55.7, MACD: +6.99 — signals neutral-to-positive momentum.

CMP ₹2,402 trades near DMA 50 ₹2,356 and DMA 200 ₹2,453 — consolidation phase.

52W High ₹3,395, CMP at ~21% discount — modest re-rating potential if earnings improve.

🎯 Suggested Entry Zone & Investment Strategy

Entry Zone: ₹2,250–₹2,300 — attractive on pullbacks, aligned with technical support.

Holding Outlook

Stable compounder with consistent cash flows and distribution depth.

Ideal for long-term, quality-focused portfolios — less volatility, slow compounding.

Watch input cost movements (crude derivatives), rural demand uptick, and traction in non-paint categories.

Would you like a comparative dashboard vs peers like Berger Paints, Kansai Nerolac, or Pidilite to analyze margins, valuations, and return spreads? I can chart it out and sharpen your perspective 🎯📈.

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