ASIANPAINT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | ASIANPAINT | Market Cap | 2,34,476 Cr. | Current Price | 2,444 ₹ | High / Low | 2,986 ₹ |
| Stock P/E | 58.4 | Book Value | 199 ₹ | Dividend Yield | 1.01 % | ROCE | 27.3 % |
| ROE | 20.7 % | Face Value | 1.00 ₹ | DMA 50 | 2,395 ₹ | DMA 200 | 2,487 ₹ |
| Chg in FII Hold | -0.67 % | Chg in DII Hold | 0.66 % | PAT Qtr | 1,146 Cr. | PAT Prev Qtr | 956 Cr. |
| RSI | 55.9 | MACD | 50.8 | Volume | 8,81,697 | Avg Vol 1Wk | 6,39,875 |
| Low price | 2,115 ₹ | High price | 2,986 ₹ | PEG Ratio | 8.25 | Debt to equity | 0.08 |
| 52w Index | 37.8 % | Qtr Profit Var | 3.80 % | EPS | 39.4 ₹ | Industry PE | 36.6 |
📊 Financials: ASIANPAINT demonstrates strong fundamentals with ROE at 20.7% and ROCE at 27.3%, reflecting efficient capital use. Debt-to-equity ratio of 0.08 highlights a near debt-free balance sheet. EPS of ₹39.4 supports earnings visibility, with quarterly PAT rising from ₹956 Cr. to ₹1,146 Cr. (+3.8%).
💹 Valuation: Current P/E of 58.4 is significantly above industry average (36.6), suggesting premium valuation. PEG ratio of 8.25 indicates expensive growth prospects. P/B ratio (~12.3) is stretched compared to book value ₹199, limiting intrinsic value comfort.
🏢 Business Model: ASIANPAINT operates in paints and coatings, benefiting from strong demand in housing and infrastructure. Competitive advantage lies in brand leadership, distribution network, and pricing power. However, valuations remain stretched relative to peers.
📈 Entry Zone: Attractive entry closer to ₹2,400–2,450, near DMA 50 (₹2,395). Current price ₹2,444 is within fair accumulation zone, but upside is capped unless earnings growth accelerates.
📌 Long-Term Holding: Suitable for long-term investors (3–5 years). Strong fundamentals and sector demand support holding, but stretched valuations require cautious accumulation and partial profit booking near ₹2,900–3,000 resistance levels.
Positive
- Strong ROE (20.7%) and ROCE (27.3%)
- Near debt-free balance sheet (Debt-to-equity 0.08)
- EPS of ₹39.4 supports earnings visibility
- DII holdings increased (+0.66%), showing domestic confidence
Limitation
- High P/E (58.4) vs industry average (36.6)
- PEG ratio of 8.25 indicates expensive growth
- FII holdings decreased (-0.67%)
- Quarterly profit variation (+3.8%) is modest
Company Negative News
- Valuations remain stretched compared to peers
- Foreign investor confidence declined (FII -0.67%)
Company Positive News
- PAT improved from ₹956 Cr. to ₹1,146 Cr.
- Stock trading above DMA 50 reflects short-term strength
- Domestic institutional buying supports sentiment
Industry
- Industry P/E at 36.6, lower than company’s valuation
- Paints and coatings sector outlook remains robust with steady demand from housing and infrastructure
Conclusion
ASIANPAINT is a fundamentally strong candidate with efficient capital use, low debt, and strong brand positioning. Entry is recommended near ₹2,400–2,450 for margin of safety. Long-term investors can hold for 3–5 years, with partial exits near ₹2,900–3,000 resistance unless earnings growth accelerates further.