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Axis Securities Report
We remain positive on Asian Paints Ltd.’s long-term prospects, supported by the following factors:
The management’s guidance for continued double-digit volume growth in FY25, buoyed by the long festive season and rural recovery;
Decline in raw material prices;
The company’s recent announcement of - A vinyl acetate ethylene emulsion and vinyl acetate monomer plant,Plans of a white cement plant through a joint venture in Fujairah, UAE, to backward-integrate key raw materials,
Expansion of manufacturing footprint by more than 30- 40%, and
Launch of differentiated next-generation emulsions and waterproofing products based on nanotechnology.
These are steps in the right direction to achieve the next phase of growth and secure the company’s market share in the long term. However, we believe the stock is likely to see sideways movement owing to increased competition from the new entrants which will keep the profitability under check in the near term.
Based on this, we maintain our Hold rating on the stock.
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