ASIANPAINT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | ASIANPAINT | Market Cap | 2,32,803 Cr. | Current Price | 2,426 ₹ | High / Low | 2,986 ₹ |
| Stock P/E | 57.9 | Book Value | 199 ₹ | Dividend Yield | 1.02 % | ROCE | 27.3 % |
| ROE | 20.7 % | Face Value | 1.00 ₹ | DMA 50 | 2,680 ₹ | DMA 200 | 2,596 ₹ |
| Chg in FII Hold | 1.14 % | Chg in DII Hold | -0.42 % | PAT Qtr | 1,146 Cr. | PAT Prev Qtr | 956 Cr. |
| RSI | 30.8 | MACD | -103 | Volume | 22,86,291 | Avg Vol 1Wk | 22,74,306 |
| Low price | 2,125 ₹ | High price | 2,986 ₹ | PEG Ratio | 8.19 | Debt to equity | 0.08 |
| 52w Index | 35.0 % | Qtr Profit Var | 3.80 % | EPS | 39.4 ₹ | Industry PE | 34.0 |
📊 Financials: ASIANPAINT shows strong fundamentals with ROCE at 27.3% and ROE at 20.7%, reflecting solid capital efficiency. Quarterly PAT improved from ₹956 Cr. to ₹1,146 Cr., showing steady earnings growth. Debt-to-equity at 0.08 highlights very low leverage. EPS of ₹39.4 is healthy relative to its market cap of ₹2,32,803 Cr.
💹 Valuation: The stock trades at a P/E of 57.9, well above the industry average of 34.0, suggesting significant overvaluation. P/B ratio is ~12.2 (2426/199), which is expensive compared to peers. PEG ratio of 8.19 highlights stretched valuations relative to growth. Dividend yield of 1.02% provides modest income support.
🏢 Business Model & Competitive Advantage: ASIANPAINT operates in paints, coatings, and home décor, benefiting from strong brand leadership and wide distribution. Its competitive advantage lies in market dominance, innovation, and diversified product portfolio. However, high valuations and moderate profit growth limit investor comfort despite strong fundamentals.
📈 Entry Zone: Technicals show RSI at 30.8 (oversold) and MACD negative, with price below DMA 50 & 200. Accumulation may be considered near ₹2,300–2,400 for long-term investors. Current valuations are stretched, so cautious entry is advised.
Positive
- Strong ROCE (27.3%) and ROE (20.7%).
- Quarterly PAT growth from ₹956 Cr. to ₹1,146 Cr.
- Low debt-to-equity ratio (0.08) ensures financial stability.
- FII holdings increased by 1.14%, showing foreign investor confidence.
Limitation
- High P/E ratio (57.9) compared to industry average (34.0).
- P/B ratio (~12.2) indicates expensive valuation.
- PEG ratio of 8.19 highlights stretched valuations.
- Dividend yield of 1.02% is modest.
Company Negative News
- DII holdings decreased by -0.42%, showing reduced domestic institutional support.
- Weak technical momentum with MACD negative.
Company Positive News
- FII holdings increased (+1.14%), reflecting foreign investor support.
- Quarterly PAT growth highlights operational strength.
- RSI at 30.8 indicates oversold levels, potential rebound zone.
Industry
- Paints and coatings sector benefits from rising housing and infrastructure demand.
- Industry P/E at 34.0 is much lower than ASIANPAINT, showing sector-wide value opportunities.
- Government push for housing and urban development supports long-term demand.
Conclusion
🔎 ASIANPAINT is financially strong with excellent return metrics, low debt, and consistent profitability. While valuations are stretched and technicals show weakness, fundamentals and industry tailwinds support long-term holding. Entry near ₹2,300–2,400 is attractive for investors seeking exposure to consumer and housing growth, but conservative investors should wait for improved valuation levels.