Asian Paints reported a 6.1% reduction in consolidated sales to ₹8,521.51 crore and a 23.3% year-over-year decline in Q3FY25 net profit to ₹1,110.48 crore. The business is cautiously hopeful about demand recovery despite obstacles.
Asian Paints Slides 5%:
On Wednesday, February 5, Asian Paints’ share price dropped over 5% to an intraday low of Rs 2,237.25. Following the Q3 FY25 results, the share price fell, suggesting demand hurt revenue and profitability. The stock was the Nifty 50’s worst loss. The brokerage firms’ lowering of their target price and earnings per share projections for the company also contributed to the downturn.
Target Price Reduced by 6% by Nuvama:
The target price for Asian Paints has been lowered from Rs 3,185 to Rs 3000 by the brokerage company Nuvama Institutional Equities. Additionally, it has reduced the projected profits per share by 7.9% for FY27 and 11% for FY26. It stated that a poor demand forecast and ongoing urban stress were the reasons for reducing the target price and EPS estimations. Nevertheless, it has kept the stock at a “purchase” recommendation.
The company’s Q3 FY25 sales and operational profit reduction are seen negatively by the brokerage. The margin shrank due to higher sales and distribution costs due to fierce competition. Customers’ downtrading and the negative demand outlook resulted in an unfavorable product mix, according to Nuvama’s research study. Additionally, due to weak urban and BIS issues, the company’s Weatherseal stock decreased 14% yearly, and White Teak stock plummeted almost 23% yearly.
Motilal Oswal Reduces EPS Projections by 4%:
For FY26 and FY27, the brokerage firm reduced its EPS projections by 4% each to account for sluggish volume growth and margin pressure. It anticipates that the stock will probably see persistent underperformance shortly due to the improvement in demand. According to Motilal Oswal Financial Services, “the main monitorables will be the industry volume recovery and competitive strategy on pricing/incentives.” With a price of Rs 2,550, the brokerage company maintained its rating at “Neutral.”
Asian Paints: Morgan Stanley Underweight
Morgan Stanley, another brokerage company, lowered Asian Paints’ target price to Rs 2,358 per equity share. It has continued to rate the stock as “Underweight.”
Jefferies, which has a price of Rs 2,000 per equity share, kept its “Underperform” rating on the company. With a target price of Rs 2047 per share, CLSA maintained an “Underperform” rating on Asian Paints in addition to Morgan Stanley and Jefferies.
With a target price of Rs 2,650 per share, Macquarie kept its “Outperform” rating while taking a contrarian stance.
In Q3 of FY25, the company’s net profit was Rs 8,549 crore, a 6% YoY decrease. From Rs 1,447.7 crore in Q3 FY24 to Rs 1,128 crore in Q3 FY25, the company’s net profit decreased 23.5%yearlyr.
