Asian Paints saw a decline of 5 per cent in its shares before closing 3 per cent lower on Wednesday after reporting a 23.5 per cent drop in consolidated net profit to ₹1,128.43 crore for the third quarter ending December 2024, along with a 6 per cent decrease in revenue to ₹8,599.44 crore.
The stock closed at ₹2,276, down 3.36 per cent on the BSE, after hitting an intraday low of ₹2,235. On the NSE, it ended the day at ₹2,274.20, down 3.40 per cent.
Factors such as downtrading, muted demand, and an adverse product mix impacted the Q3 performance, leading brokerages to adjust their target prices and take differing views.
Nuvama Institutional Equities maintained a buy rating with a reduced target price of ₹3,000, highlighting that volume growth is expected to be in single digits in the future. The brokerage also noted that margin contraction was driven by increased sales and distribution expenses due to intense competition.
Motilal Oswal reiterated a neutral call with a target price of ₹2,550, citing uncertainty around demand recovery in the near term. They believe there is limited relief for the stock under the current circumstances.
Meanwhile, Axis Securities analysts kept a hold rating with a revised target price of ₹2,440, pointing out that the stock may experience sideways movement due to subdued demand and increased competition from new players.
Elara Capital took a cautious stance on Asian Paints, issuing a sell call with a lower target price of ₹2,030, down from ₹2,240 previously, citing heightened competition and muted earnings growth as reasons for their outlook.
Global brokerage Goldman Sachs also gave a sell rating with a target price of ₹2,275, while CLSA and Jefferies assigned underperform calls with target prices of ₹2,047 and ₹2,000 respectively.
On the flip side, Macquarie provided an outperform rating with a target price of ₹2,650.
Despite the various opinions from different brokerages, the overall sentiment towards Asian Paints remains mixed, reflecting the challenges the company faces in the current market environment.
