The shares of this paint giant surged by over 2.51 percent on Thursday after a huge block deal involving a transaction of over Rs 7,700 crore. In this article, we will dive deep into the details.
With a market capitalization of Rs 2,15,162 crores, the shares of Asian Paints Ltd are currently trading at Rs 2,243 per share, down by 33.91 percent from its 52-week high of Rs 3,394 per share. Over the past five years, the stock has delivered a return of 37 percent.
A significant block deal took place this morning where a total of 3.5 crore shares were traded, or about 3.6 percent equity, with the deal value estimated at Rs 7,700 crore.
The principal buyer and seller are unknown, but market speculation suggests Reliance Industries, which holds a 4.9% stake via its investment arm Ojasvi Trading, could be the seller. The stock has been under pressure of late, as it has fallen almost 30% in two years because of heightened competition and weak demand in urban areas.
Recently, Birla Opus filed a complaint with the Competition Commission of India (CCI), accusing the company of abuse of dominance. Asian Paints has been alleged to have used intimidating techniques to inhibit dealer interaction with Grasim Industries. The complaint alleges that Asian Paints threatened dealers with lower credit limits and contract termination if they engaged with Grasim. Further, Asian Paints delayed shipments, limited access to tinting machines and supplies to pressure distributors.
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Financial Highlights
The company reported a revenue of Rs 33,906 crore in FY25, down by 4.47 percent from its FY24 revenue of Rs 35,495 crore. Coming to its profitability, the company reported a net profit decline of 33.24 percent to Rs 3,710 crore in FY25 from Rs 5,558 crore in FY24. The stock delivered an ROE and ROCE of 20.59 percent and 25.72 percent and is currently trading at a P/E of 54.84x as compared to its industry average of 40.21x.
Asian Paints is one of only a few well-established and trusted decorative paint organizations in India, offering a reasonably wide range of paints, coatings, waterproofing, adhesives, and home décor. It has continued to develop its service offerings into more full-service offerings, such as painting solutions, modular kitchens, and bath fittings. Asian Paints has created a solid brand presence in everybody’s home, along with contractors and tradespeople who are involved in home renovations and improvements.
Written by Satyajeet Mukherjee
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