Buy Asahi India; target of Rs 1400: ICICI Securities

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • AIS' auto segment revenue grew 31% YoY, driven by healthy volume growth and a favourable model mix, with EBIT margin improving to 12.3%.
  • The architectural segment's revenue picked up, growing 58% YoY, with EBIT margin expanding to 22.6%, supported by higher realisation and operating leverage.
  • The company's focus on value-added products and higher operating leverage is expected to sustain margins near 12% for FY27-29E.
  • AIS' revenue and EBITDA CAGRs are expected to be 15% and 24%, respectively, over FY26-29E, driven by growing content for value-added products, float glass capacity ramp-up, and improved realisation.

Thesis Validation Checklist

  • Investors should watch for continued growth in the auto and architectural segments, driven by healthy demand and capacity expansion.
  • Margin sustainability, particularly in the auto segment, will be crucial, as will the company's ability to maintain its focus on value-added products.
  • Any signs of slower-than-expected growth in underlying segments or increased competition in the float glass segment could pose downside risks to the thesis.