Asian Paints Share Price: Shares of Asian Paints slid up to 6.5% to an intraday low of Rs 2,454 on the BSE on Wednesday after the company posted nearly a 5% year-on-year (YoY) drop in consolidated net
profit for the December quarter. Profit came in at Rs 1,060 crore versus Rs 1,110 crore a year ago.
However, profit after tax (PAT) attributable to the company’s owners rose 7% sequentially from Rs 994 crore in Q2FY26.
Consolidated net sales increased 3.9% YoY to ₹8,850 crore in Q3, compared with Rs 8,521 crore in the same period last year.
Profit before depreciation, interest, tax, other income and exceptional items (PBDIT) climbed 8.8% YoY to Rs 1,781 crore from Rs 1,637 crore, with the PBDIT margin expanding to 20.1% from 19.2%.
What should investors do?
Citi has reiterated its Sell rating on Asian Paints, while slightly raising its target price to Rs 2,300 from Rs 2,250, implying about 12.5% downside from current levels.
Although revenue and EBITDA grew 4% and 9% YoY, respectively — aided by a favourable base — both figures missed Citi’s estimates. Decorative volumes rose 7.9% YoY, largely base-driven, but the brokerage believes underlying demand remains weak.
Management has guided for 8–10% volume growth, but value growth is likely to stay muted due to an adverse product mix. Citi has trimmed its FY26–FY28 revenue estimates by around 3%, while largely maintaining EPS projections.
The marginal target revision reflects a roll-forward to a December 2027 valuation of 45x P/E, with the brokerage retaining a cautious view.
Morgan Stanley has maintained its Underweight rating with a target price of Rs 2,194. It said growth missed consensus and weakened versus Q2, with Q3 impacted by a shorter festive season and prolonged monsoon. Rural demand was stronger than urban, but overall momentum stayed soft.
For Q4, management expects 8–10% volume growth, but a negative mix of 4–5% suggests value growth of only 5–6%. This implies FY26 revenue growth of roughly 4%, below the consensus estimate of about 5%. Morgan Stanley continues to flag intense competition and lower repainting frequency, though EBITDA margin guidance of 18–20% remains intact despite sustained brand investments.
Nomura, on the other hand, maintains a Buy rating, revising its target price to Rs 3,250 from Rs 3,275. The stock trades at roughly 47x Mar-28F EPS. Nomura has cut FY27F and FY28F EPS estimates by 2.4% and 0.2%, respectively, in line with management guidance.
Valuation remains at 60x P/E, consistent with the company’s 10-year average and the midpoint of its historical 50–80x band, applied to Dec-27F EPS.
The brokerage remains constructive, arguing that peak competitive pressure may be behind the company. Despite aggressive investments by new entrants, disruption has been limited, highlighting Asian Paints’ strong moat. Nomura expects an EPS CAGR of 10% over FY26–28F and sees earnings growth returning to low- to mid-teens over the medium term as macro conditions and competition normalise. The key risk remains higher-than-expected competitive intensity.
