Asian Paints announces Rs 2,000 crore additional capex for new manufacturing plant; stock positive

Multinational paint company Asian Paints has announced plans to set up a new water-based paint manufacturing facility with a capacity of 4 lakhs kilolitres per annum at Rs 2,000 crores. The manufacturing at the facility is expected to be commissioned in 3 years, after acquisition of land, the company informed exchanges.

"The company is exploring the possibility of making this investment and setting up the facility in Madhya Pradesh. It is expected to be commissioned in three years after acquisition of land," it has said in an exchange filing.

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The company will use latest manufacturing technology to produce paints and intermediates in the proposed manufacturing facility in an environment friendly manner, the filing added.

Shares of Asian Paints opened flat on Monday, January 9, amid a broad-based buying in the benchmark indices. At 11 am, it was quoting at Rs 3,000 on the NSE, higher by 0.70 per cent. The counter has fallen close to 16 per cent in the last one year.

Global brokerage firm Morgan Stanley has an Underweight rating on Asian Paints with a target price of Rs 2,674. Amid rising competition in the sector, Morgan Stanley said that it remains less constructive on paints.

Macquarie, on the other hand, said that it is bullish on Asian Paints and has maintained an Outperform rating with a price target to Rs 3750.

In another released development, the Mumbai-based company said that it will release is third quarter result on January 19.

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