Hey @Ghanshyam_Singh, Thanks for asking. I have currently started monitoring Asian Paints, this is new investment for me. I have exposure to Indigo Paints and Berger Previously.
Please take it with hint of salt this is my understanding. My initial thoughts!
- It is biggest decorative paints company and all good things marketshare, management, data and everything but my reason for investing is I believe paints as segment would continue to grow as india becomes richer and there is higher spending power
- Additionally I own the basket of paint companies as I expect all to do well in long term.
Why I stated investing in Asian pains
- Because it is falling !!
- Yes I know this should not be the reason for investment but for me, Asian paints is fundamentally strong company with good promoters. It has been trading at premium compared to other peers in consumer durables. But now the permium is eroded and I cot get at decent valuation. Yet not the cheap or extremely cheap. I don’t expect asian paints to fall in my cheap category anytime!!
- P/E or P/B ratios are comfortable for me now. Additionally there is moderate sales growth but the uncertanity in oil prices have came down, which would allow it to be stable
The biggest threat !!
- Birla and JSW group has started coming into decorative paint business, this could potentially harm the marketshare asian paints command, there would be price war between these giants. But I believe that asian paints would be able to overcome this with previous experience and data which it has. More of my entry is at moderate valaution, even if there is P/E derating, with sales and profit growth, I would still be safe.
Disc: This is just my view and I’m invested in Asian Paints (currently 1% of PF will be adding and bring around 5-7% in 6 months)
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