Asian Paints (APNT IN) – Q1FY27 Result Update – Steady outlook; 1Q aided by lower-cost inventory – HOLD
Published on 29 Jul 2026
We raise our FY27/FY28 EPS estimates by 7.4%/2.6%, driven by 1) EBITDA margin guidance of 18-20% despite crude volatility 2) favourable near-term demand outlook led by healthy festive season 3) sustained traction in both Auto & general industrial segments. While the near-term demand environment remains encouraging, the competitive intensity in decorative paints remains at all time high levels, with Birla Opus, JSW Akzo and JK Cement continuing to gain ground.
We expect double-digit earnings growth to sustain over the next two quarters; however, 2Q may witness some margin pressure as higher-cost inventory flows through for the full quarter (we have factored in ~70bps YoY GM contraction in 2Q). While the stock is unlikely to see any sharp correction in the near term, we see limited upside from current levels given its rich valuations. We estimate a revenue/EPS CAGR of 9.9%/11.9% over FY26–28 and revise our TP to Rs2,720 (vs. Rs2,654 earlier). At 46.8x FY28 EPS, we see limited scope for a meaningful re-rating and expect the stock to remain range-bound over the near-to-medium term. Retain Hold.
