Citi has maintained its sell rating on Asian Paints, with a target price of ₹2,300 per share, after Q3FY26 results highlighted ongoing challenges in demand recovery.
Revenue grew just 4% YoY, coming in 4% below Citi’s estimate, despite a low base from last year. EBITDA and adjusted PAT rose 9% YoY, but both were around 6% below Citi’s expectations, even as benign raw material costs provided some support.
India decorative volumes increased 7.9% YoY, aided by a low base, though this was partly offset by a shorter festive season and extended monsoon. Management indicated that the December exit growth rate improved, with a similar trend seen in January, and guided for Q4 volume growth of 8–10%.
However, Citi highlighted that the volume-value gap of 4–5% is likely to persist, with management expecting revenue growth of around 5–6% over the next few quarters and margins in the 18–20% range. Competitive intensity remains elevated, driven by new entrants and recent M&A activity in the sector.
In light of these factors, Citi has cut its FY26–28 revenue estimates by 3%, citing slower growth visibility and sustained competitive pressure.
Disclaimer: The views and recommendations above are those of Citi. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
