HSBC has started coverage on Asian Paints(ASPN.NS) with an "overweight" rating and a price target of 600 rupees, implying a 25 percent upside from current levels.
India's paints market is set to double every 6-7 years by volume and market leader Asian Paints is well placed to leverage growth, HSBC said in a note on Friday.
Asian Paints still stands to deliver volume growth of 9 percent in FY14, after impressive volume growth of 11 percent year-on-year in the first quarter of FY14, it said.
"While the valuation looks expensive, we believe it is actually pricing in relatively modest growth expectations," HSBC said. * At 9.30 a.m., shares in Asian Paints were up 0.5 percent at 482.30 rupees.