ICICI Securities believes the impact of the increase in competitive pressures may continue to hurt profitability and Asian Paints could post year-on-year earnings decline in FY25 after a gap of almost 17 years. “We model Asian Paints to report revenue and PAT CAGR of 4% and -9.9%, respectively over FY24-26E,” it said.
JPMorgan has also downgraded Asian Paints to “underweight” from “neutral” and reduced its price target to Rs 2,400 from Rs 2,800.
“While broader demand weakness has weighed on the overall industry growth in recent quarters, Asian Paints is lagging peers with differential expanding further in the second quarter both on the revenue and earnings front,” it said. JPMorgan has lowered its FY2025 – 2027 earnings per share (EPS) estimates for Asian Paints by 10% to 12% respectively.
Shares of Asian Paints tumbled 8% on Monday to close at Rs 2,547.80 apiece after the firm reported a 43.71% decline in consolidated net profit to Rs 693.66 crore for the September quarter. Its revenue from operations was down 5.3% to Rs 8,027.54 crore in the September quarter.
Managing Director & CEO Amit Syngle said that the paint industry faced a subdued demand environment during the quarter. “Domestic decorative coatings segment volumes declined marginally while overall domestic coatings revenue declined by 5.5% for the quarter impacted by muted consumer sentiments and extended rains and floods in some parts of the country,” he added.
