Fact based stock research
Asian Paints (NSEI:ASIANPAINT)

INE021A01026

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Asian Paints stock research in summary

asianpaints.com

ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Asian Paints (Specialty Chemicals, India) shares have lower financial characteristics compared with similar stocks. Shares of Asian Paints are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives), show below-average growth (Growth Rank of 15), and are riskily financed (Safety Rank of 42), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Asian Paints's financial characteristics. As the company Asian Paints's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 35), low growth (Obermatt Growth Rank of 15), and risky financing practices (Obermatt Safety Rank of 42), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	35
Growth Rank	15
Safety Rank	42
Combined Rank	8

Country	India
Industry	Specialty Chemicals
Index	BSE Sensex, Good Governace Growth Markets, CNX Nifty 50
Size class	X-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Why popular stocks have low ratings

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Asian Paints

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	11	11	11	35
GROWTH
GROWTH	81	59	77	15
SAFETY
SAFETY	60	53	40	42
SENTIMENT
SENTIMENT	n/a	65	84	^new
360° VIEW
360° VIEW	n/a	49	65	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Asian Paints is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	11	11	11	35
GROWTH
GROWTH	81	59	77	15
SAFETY
SAFETY	60	53	40	42
COMBINED
COMBINED	46	25	29	8

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Asian Paints the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), Asian Paints shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Asian Paints. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 65% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 39 which means that the stock price compared with what market professionals expect for future profits is higher than 61% of comparable companies, indicating a low value concerning Asian Paints's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 17 which means that the stock price compared with what market professionals expect for future profit levels is higher than 83% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 13 is also low. Compared with invested capital, the stock price is higher than for 87% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 35, is a hold recommendation based on Asian Paints's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Asian Paints? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Asian Paints only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	11	15	13	39
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	29	3	5	17
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	1	5	5	13
DIVIDEND YIELD
DIVIDEND YIELD	42	45	55	65
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	11	11	11	35

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Asian Paints; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), Asian Paints shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Asian Paints. Only Capital Growth has a good rank of 63, which means that currently professionals expect the company to grow its invested capital more than 12% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 34 which means that currently professionals expect the company to grow less than 66% of its competitors. Profit Growth with a rank of 12 and Stock Returns with a rank of 21 are also low (below 79% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Asian Paints is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	74	64	50	34
PROFIT GROWTH
PROFIT GROWTH	74	21	75	12
CAPITAL GROWTH
CAPITAL GROWTH	n/a	93	66	63
STOCK RETURNS
STOCK RETURNS	78	55	53	21
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	81	59	77	15

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Asian Paints.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 42 (better than 42% compared with alternatives), the company Asian Paints has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Asian Paints is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Asian Paints. Leverage is at a rank of 52, meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors. Liquidity is also good at a rank of 57, meaning the company generates more profit to service its debt than 57% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 28, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 72% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 42 (worse than 58% compared with alternatives), Asian Paints has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Asian Paints. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Asian Paints and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	54	60	50	52
REFINANCING
REFINANCING	14	18	22	28
LIQUIDITY
LIQUIDITY	100	74	65	57
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	60	53	40	42

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Asian Paints and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	7	19	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	46	56	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	78	75	^new
MARKET PULSE
MARKET PULSE	n/a	79	91	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	65	84	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Asian Paints.
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