JPMorgan has upgraded its rating on Asian Paints from ‘Underweight’ to ‘Neutral’ and revised the target price to ₹2,500, implying a potential upside of about 6.5% from the current market price of ₹2,347.80.
The upgrade follows emerging signals of a potential recovery in volume growth, even though the firm cautioned that the sustainability of this improvement needs to be watched. Importantly, the brokerage believes EBITDA margins have likely bottomed out in FY25.
JPMorgan noted this marks the first marginal earnings upgrade (1–2%) after several quarters of downward revisions. The stock has also witnessed a significant de-rating and is now trading below its 5-year and 10-year average valuation multiples, which partially justifies the more balanced stance.
However, JPMorgan highlighted that the competitive intensity remains high, with newer players like Birla’s Opus Paints and the JSW–Akzo Nobel alliance creating pressure in the decorative paints segment. As a result, it expects the pace of margin recovery to remain modest in the near to medium term.
Disclaimer: The views and investment recommendations expressed in this article are those of JPMorgan and do not represent the views of this publication. Investors are advised to consult their financial advisors before making any investment decisions.
