Margin concerns may limit upsides in Asian Paints stock

While volume performance has been strong, valuations factor in the gains

Despite the impact of the second wave on demand, India’s largest paint maker did not disappoint on the revenue front. Led by pent-up demand, sales of Asian Paints saw a sharp rebound in June helping the company restrict the sales decline on a sequential basis to 16 per cent. Given the low base last year, a comparison with Q1FY20 indicates a 9 per cent uptick in revenues which is impressive given lockdowns in multiple states in recent months. Investors too cheered the result and the stock gained 6 per cent sending its market capitalisation over the Rs 3 trillion mark.