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CapitalVia Global
Asian Paints (Buy)
Target: ₹2,870
CMP: ₹2,549.40
Asian Paints are engaged in the business of manufacturing, selling, and distribution of paints, coatings, products related to home decor, bath fittings, and providing of related services. Despite of the subdued consumption sentiment, decorative paint companies reported impressive volumes in the previous quarter. Asian Paints has delivered an operationally strong quarter as it reported a healthy double-digit volume growth leading to 17 per cent revenue growth led by aggressive channel push.
Growth is driven by market share gains from unorganised sector post-implementation of GST and incremental volume growth from traded goods.
The current universe of dealers in India stands at 1.5 lakh and the management expects to continue the uptrend as the urbanisation pace picks up in tier-II and tier III towns. The company has witnessed a 10 per cent addition to the dealer network on an annual basis and the trend is expected to continue. Thereby, increasing the scope for dealer network expansion is huge and would help in aiding growth in volume in the long run.
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