7 hours ago
Asian Paints Ltd., India's largest paints manufacturing company, has received its first share price target below the mark of ₹2,000, from brokerage firm CLSA, after its March quarter results on Friday, May 9.
CLSA has maintained its "underperform" recommendation on Asian Paints, but has cut its price target on ₹1,966 from ₹2,009 earlier. The revised price target implies a potential downside of 14.5% from Thursday's closing levels.
This is the lowest price target for Asian Paints within the street.
CLSA wrote that it maintains its cautious stance on the stock as heightened competitive activity will keep growth and margins under pressure. Therefore, it has reduced its financial year 2026-2027 Earnings Per Share (EPS) estimates by 0% and 2% over this period.
Citi has also maintained its "Sell" recommendation on the stock and cut its price target to ₹2,100 from ₹2,300 earlier.
The brokerage said that sustained demand weakness in urban markets, increasing competitive intensity and M&A activity could drive further earnings downgrades or de-rating for Asian Paints going forward.
As a result, Citi has cut its financial year 2026-2027 Earnings per Share (EPS) estimates for Asian Paints by 8% and 11% respectively.
"Increased competitive intensity for market share, talent, shelf space and mind share will keep margins under pressure," Citi wrote in its note.
Asian Paints reported a weaker-than-expected result for the March quarter, as its 1.8% volume growth was below the CNBC-TV18 poll, that had projected the volume growth to be between 4% and 5%. Other parameters were also below expectations.
Out of the 38 analysts that have coverage on Asian Paints, 21 of them have a "Sell" recommendation on the stock, while 11 of them have a "hold" rating. Only six analysts have a "buy" recommendation on the stock.
Shares of Asian Paints are recovering from opening lows, currently trading 0.3% lower at ₹2,294.5.
