Asian Paints Limited

Basic Materials — Specialty Chemicals · NSE

₹2,331.90−₹18.10 (−0.77%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

No individual risk factor stands out on this snapshot.

In simple words: Strong business and financial position, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Asian Paints Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Asian Paints Limited, together with its subsidiaries, engages in the manufacture, distribution, and sale of paints, coatings, and products related to home decoration and bath fittings, kitchen, and wardrobe in India, Asia, the Middle East, Africa, and the South Pacific region.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees11,162

Annual revenue₹35,541 Cr

How does it make money?

Turns over ₹35,541 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 11,162 employees supports ₹3.18 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin20.6%

Net margin12.2%

Revenue / employee₹3.18 Cr

Who are its competitors?

The closest listed comparisons in its industry are PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

PIDILITE INDUSTRIES LTDP/E 57.8x · ROE 24.4%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 24.4%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 20.2% against a peer median of 15.4% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE24.4%

ROE20.2%

Peer median ROE15.4%

What is the outlook?

27 analysts covering the stock expect revenue to grow about 7.8% and earnings to grow about 11.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+7.8%

Est. earnings growth+11.0%

Analysts27

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +3% while net margin moved +2% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+3%

Margin effect+2%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 1.1% — barely ahead of inflation
✗ Profit CAGR of only 1.7%

Quality vs. Valuation

Company Quality

63/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

39/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

46.9x

3Y Median

63.9x

40 monthly readings · mean 59.9x · range 38.3x–79.5x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 27% below its 3y median of 63.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 39% above the peer median of 33.8x.

vs. its own history

Cheap

63.9x median over 40 months · -27%

vs. sector peers

Expensive

33.8x median of 3 peers · +39%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

46.9x

P/B

10.47x

EV/EBITDA

31.0x

PEG

26.88

Dividend Yield

1.18%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 19.1% to 20.6% over 3 years.
Cash generation is improving
Free cash flow is up 104% over 3 years.
High return on capital employed
ROCE of 24.4% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 46.9x the stock trades 27% below its own median of 63.9x.
Very low debt
Debt/Equity of 0.18x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 103% over 3 years — worth checking what it funded.
Return on equity is falling
ROE has dropped from 25.7% to 20.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 32.6% to 24.4% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴Debt has risen sharplyFinancial
Total debt is up 103% over 3 years, from ₹1,933 Cr to ₹3,929 Cr.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 24.4% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 19.1% to 20.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 27% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹5,601 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 39% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 1.1% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 25.7% to 20.2%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 19%✓ 20.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 1.1% CAGR
Latest reported year was 17.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹5,601 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 21%✓ 24.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

8 good · 1 neutral · 2 weak

Market Cap

₹2.24 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

46.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

10.47x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹49.68

Profitable

Profitable on a per-share basis

ROE

20.2%

Strong

Strong capital efficiency

ROCE

24.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.18x

Low

Conservative leverage

Revenue Growth (YoY)

17.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

39.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.18%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹5,601 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹2,331.9

P/E (Forward)

38.5x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

17.7%

Good

Healthy core-business profitability

Net Margin

12.8%

Good

Strong bottom-line conversion

Current Ratio

2.21

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.30

Defensive

Steadier than the market

52W Range Position

25%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

2391.2 / 2517.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

35.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹34,389 Cr	₹35,395 Cr	₹33,815 Cr	₹35,541 Cr	+1.1%
EBITDA	₹6,558 Cr	₹8,176 Cr	₹6,311 Cr	₹7,319 Cr	+3.7%
EBITDA Margin	19.1%	23.1%	18.7%	20.6%	—
PAT (Net Profit)	₹4,106 Cr	₹5,460 Cr	₹3,667 Cr	₹4,325 Cr	+1.7%
EPS	₹42.82	₹56.94	₹38.25	₹45.11	+1.8%
ROE	25.7%	29.2%	18.9%	20.2%	—
ROCE	32.6%	35.3%	24.0%	24.4%	—
Total Debt	₹1,933 Cr	₹2,474 Cr	₹2,290 Cr	₹3,929 Cr	+26.7%
Free Cash Flow	₹2,748 Cr	₹3,608 Cr	₹2,594 Cr	₹5,601 Cr	+26.8%

🟡 Revenue has been broadly flat over 3 years (1.1% a year).

🟢 EBITDA has grown at 3.7% a year over 3 years.

🟢 EBITDA Margin has risen from 19.1% to 20.6% over 3 years (+1.5 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (1.7% a year).

🟡 EPS has been broadly flat over 3 years (1.8% a year).

🔴 ROE has fallen from 25.7% to 20.2% over 3 years (-5.4 pts).

🔴 ROCE has fallen from 32.6% to 24.4% over 3 years (-8.2 pts).

🔴 Total Debt has grown at 26.7% a year over 3 years.

🟢 Free Cash Flow has grown at 26.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹34,534 Cr

Total Liabilities

₹12,520 Cr

Total Debt

₹3,929 Cr

Cash & Equivalents

₹673 Cr

Operating Cash Flow

₹7,088 Cr

Capex

-₹1,487 Cr

Shareholding (proxy)

Institutional Holding

27.4%

Insider Holding

52.9%

Corporate Actions

Next Earnings

29 Oct 2026

Dividend Rate

₹27.5

Ex-Dividend Date

23 Jun 2026

Analyst Consensus

Recommendations

17 Buy · 10 Hold · 7 Sell

Target Price (Mean)

₹2,985.59

+28.0% vs CMP

Target Range

₹1,915 – ₹3,827

Peer Comparison

Company	P/E	ROE
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 positive3 mixed2 general

Asian Paints Share Price Fall 3.62% To ₹2,290.20, As Oil Price Surge Weighs On Paint Stocks

HDFC Sky, 02 MarPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Asian Paints Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Simply Wall Street, 01 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

India's Asian Paints maintains FY27 growth target, sees no immediate price hikes

Reuters, 29 Jul

Asian Paints Q2 FY27 Results: Check date, time, dividend update, share price trend and past performance

Upstox, 07 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Kunal Bothra sets INR 1,505 target for Asian Paints stock

ad-hoc-news.de, 16 Oct

Asian Paints Shares Fall Over 2% Amidst Volatility

Moneycontrol.com, 18 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong13.9/20

🟢Financial HealthStrong15.6/20

🔴GrowthWeak7.4/20

🟢ProfitabilityStrong10.4/15

🔴ValuationDemanding6.7/15

🟢RiskLow8.5/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 19%20.6%
✗Revenue growth stays above 4% a year1.1% CAGR
✓Free cash flow remains positive₹5,601 Cr
✓Debt / EBITDA stays below 2x0.5x
✓ROCE stays above 21%24.4%