The main negative thus which spooked the scrip today are the OPMs which have come in at 18% vs 20% sequentially and 21.33% YOY; NPMs were at 11.55 vs 13.03% sequentially and 13.35% YOY. Therefore, the hit on Margins is BOTH sequentially as well as YOY which is pretty bad. As we all know, since these Scrips are trading at such premium valuations, any negative will be swiftly punished by the Markets, as evidenced by the 4% plus fall in the scrip today. A similar event happened with HSIL yesterday. So, this Blog reiterates extreme caution in entering FMCG/Consumption at current levels.
Having said the above, I am of the opinion that the macro growth story for Asian Paints is vey much intact and one can safely look at entering once the scrip corrects a little more. Readers of this Blog may recall, that the Best Entry Level Call given on 21/9/2011 by this Blog was for entry in the range 2750-2900. I still concur with this entry range and we will ,in all likelihood ,get these levels soon on the stock. So, prospective investors may remain vigilant and enter in the 2750-2900 range in staggered bits.
DETAILED ASIAN PAINTS Q2 FY2012 RESULTS SEE HERE
ORIGINAL CALL ON 21/9/2011 DETAILS READ HERE
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