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Asian Paints shares surge 11% on stellar Q4 results: Should you buy, sell or hold?

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The company reported an 81.13 percent jump in its consolidated net profit to Rs 869.89 crore in Q4.

Asian Paints shares surge 11% on stellar Q4 results: Should you buy, sell or hold?
The share price of Asian Paints surged 11 percent on Friday after the company reported better-than-expected earnings for the March quarter. The company reported an 81.13 percent jump in its consolidated net profit to Rs 869.89 crore in Q4 helped by volume growth in the domestic as well as in the international market.
The company had posted a net profit of Rs 480.25 crore during the January-March quarter of the previous fiscal, Asian Paints said in a regulatory filing.
The stock rose as much as 11 percent to its day's high of Rs 2,839 per share on the BSE.
Its revenue from operations was up 43.49 percent at Rs 6,651.43 crore during the quarter under review as against Rs 4,635.59 crore in the corresponding period of the previous fiscal.
However, brokerages remained mixed on Asian Paints despite the stellar results. While Goldman Sachs has a 'sell' call, HSBC is bullish and Jefferies is neutral.
As per HSBC, the company posted an exceptional performance in FY21 despite disruptions. It added that the company aims to mitigate pressure via price hikes and cost efficiency and that outlook for FY22 remains strong.
Jefferies noted that the firm gained market share from organised as well as unorganised players in Q4. However, it added that the outlook for FY22 remains uncertain in the wake of the second wave of the COVID-19 pandemic.
The company said that its international business portfolio continued to record exceptional double-digit volume growth, led by good growth in Asia and the Middle East.
“The huge inflationary trend in raw material prices has been worrying, however, its impact on profitability has been negated with some path-breaking work on sourcing and cost optimization,” it said.
Commenting on the results, Asian Paints Managing Director & CEO Amit Syngle said, "We have seen a very strong quarter aided by good demand across rural and urban areas at the country level."
"On the heels of a healthy Q2 and Q3 recovery, this quarter saw exceptional growth across businesses and consumer segments. This quarter, the performance has been outstanding, discounting even the slightly lower base last year same quarter," he said.
Over the present conditions, Syngle said, "The current business environment is unprecedented, and we would continue to strongly engage with all our stakeholders taking all necessary measures to tackle this uncertainty”

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Currency

CompanyPriceChng%Chng
Dollar-Rupee74.36500.00000.00
Euro-Rupee88.62800.00000.00
Pound-Rupee103.56300.00000.00
Rupee-100 Yen0.67110.00000.00