Asian Paints Ebidta Margins Impacted, Maintain ACCUMULATE::Emkay

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Asian Paints

Ebidta Margins Impacted, Maintain ACCUMULATE

ACCUMULATE

CMP: Rs 2,697                                       Target Price: Rs 2,923

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n     Asian Paints (APL) Q4FY11 performance below expectation, led by higher then expected decline in Ebidta margins (-180 bps to 14.7%) – APAT decline -3% yoy to Rs1.9 bn

n     Implemented 6% price hike,  total price hike of 18.4% in last 9 months- whereas corresponding increase in raw material index is 33%

n     Re-iterate (1) Ebidta margins would trail cost inflation and (2) (2) volume growth would reverse to median growth in worst case

n     Revised FY12E and FY13E earnings by -5% to Rs98.7/Share and Rs115.2/Share - Maintain ‘ACCUMULATE’ rating with target price of Rs2,923/Share