Overview of Asian Paints Limited and Intrinsic value of shares

 

 

Overview of Asian Paints Limited & Intrinsic Value calculation of shares

Asian Paints https://www.asianpaints.com/ is India s leading paint and d cor company and ranks among the top 10 Decorative coating companies globally. Asian Paints manufactures a wide range of paints for decorative and industrial use and also offers water proofing, adhesives and services under its portfolio. The company is also present in the Home d cor segment and offers Modular kitchens and wardrobes, Bath fittings and sanitary ware, decorative lightings and wall coverings.

 

FCFE Details of Asian Paints Limited shown below, Indian Rupees in Crores, except per share data

Year	Value	FCFE or Terminal Value	Present Value at 9.58%
0	FCFE0	7347	7347
1	FCFE1	8471	6705
2	FCFE2	9585	7055
3	FCFE3	10640	7285
4	FCFE4	11101	7380
5	FCFE5	11844	7026
5	Terminal Value (TV5)	438803	42798

Intrinsic value of Asian Paints Limited	320521 Crore
Market cap of Asian Paints Limited	2.795 Trillion
Intrinsic value of Asian Paints Limited common stock (per share)	Rs.3342
Current share price on 05/11/2024	Rs.2888

 

Required rate of Return

Assumptions

Rate of return on LT Treasury Composite(Rf)	7.3%
Expected rate of return on market portfolio(E(RM)	14%
Systematic risk of Asian Paints Limited. Common stock (β)	0.34
Required rate of return on Asian Paints Limited Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 7.36% +1.1[14% - 7.36%]	9.58%

 

 

 

 

 

FCFE Growth rate Forecast

Asian Paints Limited. H-Model

Year	Value	Growth Rate
1	g1 (PRAT Model)	15.31%
2	g2 (Linear Interpolation)	13.15%
3	g3 (Linear Interpolation)	11%
4	g4 (Linear Interpolation)	4.33%
5	g5 (Single stage model)	6.7%

 

2024 Calculations

Retention rate	54.11%
Dividend yield	0.98%
Profit margin	15.35%
Return on Equity	28.61%
Asset turnover	1.20
Financial leverage	1.54
EPS	56.95
PE Ratio	49.83

 

 

 

 

 

 

 

 

 

Sources : https://www.asianpaints.com/content/annualreport/annual-report-23-24.html, https://www.asianpaints.com/, https://finance.yahoo.com/ , https://companiesmarketcap.com/