Amid strong volumes and revenue, brokerage firms expect Asian Paints to surge – check target levels

On the back of strong volume growth and operating income in Q4FY21, the brokerage firms are now bullish on Asian Paints expect the shares of the company to rise exponentially. 

Asian Paints’ on Thursday reported an 81.1 per cent rise in the net profit to Rs 870 crore on the year-on-year (YOY) basis in March-ended quarter of the financial year 2020-21. Similarly, the company’s revenue grew by 43.5 per cent to Rs 6,651.4 crore YoY in the same quarter, with the volume growth at 48 per cent. 

In this regard, Credit Suisse maintains an outperform call on Asian Paints as it expects resilient volume growth going forward. It said, the fourth quarter of the company is exceptionally strong and reported 13 per cent volume growth annually despite the covid crisis. 

The brokerage firm maintained a Buy stance with a target of Rs 2800, which was achieved intraday day today, however, the stock is currently trading over eight per cent at Rs 2770 per share levels. Credit Suisse said the margin pressure in near term is likely to be transient. 

Similarly, HSBC has a Buy call On Asian Paints as a company gives an exceptional performance in FY21 despite disruption due to covid, adding further, the outlook for FY22 remains strong as well. It said that Q4 volume and revenue growth of 48 and 43 per cent respectively were a massive beat. 

The brokerage firm sets a target of Rs 3150 per share, as the company aims to mitigate the margin pressure through price hikes and cost efficiency. 

On the contrary, Jefferies maintains 'Hold' on Asian Paints and cuts target to Rs 2,400 from Rs 2,500 per share. It expects the outlook to remain uncertain amid the second wave of coronavirus. It adds, the company gained market share from organised as well as unorganised players. 

The leading paint company said that the board of directors recommended a final dividend of Rs 14.50 per equity share, taking the total dividend to Rs 17.85 per equity share for FY21.