Introduction
With 75+ years of experience and innovation in the Paint industry, Asian Paints has come a long way. From small beginnings to becoming the leading paint manufacturer in India, it has achieved a multitude of feats.
In this blog, we will cover a few facts about the company and discuss whether investing in this company’s shares is viable by analysing its growth potential!
Asian Paints Enterprise Financial Analysis
Asian Paints traces its roots to a garage in Mumbai in 1942, when it began as a venture by four friends.
The company’s early 1950s shift to ornamental paints altered everything. This approach supplemented rising housing and construction demand for high-quality paints. Recently, the company has ventured into the production of eco-friendly paints and varnishes.
With this brief introduction to the company, it is time to delve into its financial aspects! As of May 2024, the market cap of Asian Paints is Rs 2,85,246 crores, hiking Asian Paints’ reputation in India’s paint business.
The profits in Q3 of fiscal year 2024 have increased by 34.96%, while the revenue has increased by 5.40%.
Here are other metrics that must be considered by investors to make an informed investment decision:
| Category | March 2023 | Dec 2022 |
| Revenue from operations | Rs. 8,750.8 cr | Rs. 8,607.50 cr |
| Basic EPS | 12.87 | 11.19 |
| Total Operating Revenue | Rs8787.34 cr | Rs.8636.74 cr |
Asian Paint Share Price Analysis
As of May ‘24, the Asian Paint share price is trading around Rs. 2800+. The following Asian Paint share price chart gives a better idea of its recent market trends.
The PE and PB ratio of Asian Paints stands at 50.59 and 16.73, respectively, as of May 2024. The stock has a 52-week high of Rs 3568, and a 52-week low of around Rs 2766.15 for the same day.
The company has shown a 105.19% increase in share price returns over the past 5 years and 11.20% over the past 3 years.
Should One Invest in Asian Paints’ Stock?
Asian Paints is constantly seeking ways to diversify its revenue streams, and by the financial year 2026, it aims to achieve 8%-10% revenue contribution from the home decor division.
Additionally, the company is also actively investing in expanding its greenfield and brownfield capacities, which indicates the company’s commitment to growth in the future.
The company is going strong as the promoter holding (52.63) has not changed in the last 9 months. Domestic Institutional Investors’ holding has also increased from 9.95 in June 2023 to 11.54 in March 2024. This shows positive momentum in this stock, making it a good investment choice.
The Bottom Line
Asian Paints is well-positioned among its competitors, with its recent initiatives of transitioning from ‘share of surface’ to ‘share of space’ and backward integration of critical raw materials, combined with its strong distribution network.