Asian Paints’ recent performance has led to cautious reviews from major brokerages, with issues ranging from weaker consumer sentiment to rising operational costs. Here’s a summary of key ratings and target prices from various brokerages:
| Brokerage | Rating | Target Price | Key Highlights |
|---|---|---|---|
| CLSA | Underperform | ₹2,290 | Attributed sales decline to weaker consumer sentiment; sales growth lagged behind listed competitors. |
| Morgan Stanley | Underweight | ₹2,522 | Subdued demand and extended rains impacted earnings; volume growth of -0.5% underperformed peers. Key watch areas: product mix, rising rebates, employee costs, and high selling expenses. |
| Nomura | Neutral | ₹2,500 | Anticipates volume improvement in H2FY25; expects overall sales and EBITDA to remain flat. |
| JPMorgan | Underweight | ₹2,400 | Downgraded due to significantly weaker-than-expected performance; FY25-27 EPS estimates cut by 10-12%. |
| Jefferies | Underperform | ₹2,100 | Noted a significant miss in Q2; concerns over competitive pressures blurring the company’s outlook. |
Key Brokerage Insights
- CLSA: Maintains an ‘Underperform’ rating, noting Asian Paints’ sales underperformance compared to peers, with weaker consumer sentiment impacting growth.
- Morgan Stanley: Sees Asian Paints as ‘Underweight’ due to subdued demand and operational challenges, including negative volume growth and increasing expenses.
- Nomura: Holds a ‘Neutral’ outlook, with potential for volume recovery in the second half of FY25 but expects overall sales and profitability to stay flat.
- JPMorgan: Downgraded the stock to ‘Underweight’ after a disappointing Q2 performance, with cuts to EPS forecasts as competition intensifies.
- Jefferies: Echoes concerns with an ‘Underperform’ rating, emphasizing a line-by-line miss in earnings and heightened competition impacting future growth.
Most brokerages remain cautious on Asian Paints due to market challenges, with limited optimism in the near term for robust growth.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
