4 AKZOINDIA share price target reports by brokerages below. See what is analyst's view on AKZOINDIA share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Sharp decline in volumes in the month of March, for both decorative as well industrial paints led to weak numbers on expected lines for Akzo in Q4FY20. It reported 17.6%/16%/23.2% YoY decline in revenues/EBITDA/PAT, largely due to Covid-led disruption and some underlying weakness in automotive coating. The short-term environment is indeed extremely challenging, but notably, the company’s fundamentals and the category are intact with volume-led growth potential and stable/improving margin profile arising from rational competition. We model a 30% decline in revenues in 1H with recovery in 2H and normalcy by end FY21E. Maintain ADD with a revised price target of Rs 1975 (from Rs.2160) at 33x FY22 earnings based on sharp recovery in FY22
We estimate that branded paint demand will remain robust in a country like India where per capita consumption is very low and 30% paint market is still unorganised. Management of Akzo also indicated that the volume trends remain strong for the company and expect the trend to continue in medium term.Akzo does not intend to chase volumes by growing share of low-value, low- margin products such as putty and distemper, in line with its strategy to achieve profitable volume growth. Hence, we expect Akzo to continue to record lower volume growth compared to other top listed paint companies. We build 8% volume growth in FY21E and 11% in FY22E our estimates. We estimate revenue CAGR of 10.5% and earnings CAGR of 10% over FY20E to FY22E. Maintain ADD with an increased TP of Rs 2270 (from Rs 2080) at 36x FY22E earnings (at 25% discount to PE multiple of larger peers).We estimate healthy free cash generation and marginal improvement in return ratios. A sustained weakness in economy poses risks to our estimates.
We estimate that branded paint demand will remain robust in a country like India where per capita consumption is very low and 30% paint market is still unorganised. Management of Akzo also indicated that the volume trends remain strong for the company and expect the trend to continue in medium term. Akzo does not intend to chase volumes by growing share of low-value, low- margin products such as putty and distemper, in line with its strategy to achieve profitable volume growth. Hence, we expect Akzo to continue to record lower volume growth compared to other top listed paint companies. We build 7-8% volume growth CAGR over FY19-FY21E in our estimates. We maintain our estimates and expect consolidated sales and earnings CAGRs of 8% and 10% respectively over FY19-FY21E. Maintain ADD with an increased TP of Rs 2080 (from Rs 1800) at 37x FY21E earnings (at 25% discount to PE multiple of larger peers).We estimate healthy free cash generation and marginal improvement in return ratios. A sustained weakness in economy poses risks to our estimates.
Stable volume growth in the decorative segment and weakness in the industrial segment (primarily automotive) and benign raw material price situation were the highlights of the results for Akzo during the quarter. Maintain ADD with an unchanged TP of Rs 1800 at 33x at FY21E earnings.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
DISCLAIMER: Information is provided "as is" and solely for informational purposes, not for trading purposes or advice, and may be delayed. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and FrontPage will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein.