Citi has reiterated its sell rating on Asian Paints and retained the target price at ₹2,150, highlighting continued weakness in profitability and concerns around intense competition. The stock last closed at ₹2,927.85.
The brokerage noted that the company’s Q1FY26 performance marked the sixth consecutive quarter of year-on-year EBITDA decline, with EBITDA and PAT falling 4% and 5%, respectively. The negative trajectory was attributed to an adverse product and pricing mix, which dropped 5.1%. While the India decorative segment saw volume growth of 3.9%, the value declined 1.2%, indicating pricing pressure.
Citi added that management commentary reflected several cautionary signals: higher rebates, continued stress on margins due to product mix, and an intense competitive environment from both new and existing players. While Asian Paints maintained its margin guidance of 18–20%, the brokerage remains concerned about the gap between volume and value growth, which it expects to persist in the near term.
Demand showed slight green shoots, but Citi believes the company’s growth outlook remains challenged, particularly on the value front. Despite maintaining guidance, Citi sees limited upside and remains cautious.
Disclaimer: The views and investment recommendations expressed in this article are those of the respective brokerage firm—Citi—in this case. These do not represent the views of this publication. Investors are advised to consult certified financial advisors before making any investment decisions. Ask ChatGPT
