CLSA has reiterated its underperform rating on Asian Paints with a target price of ₹1,927, cautioning that competitive pressures in the paints industry remain elevated despite growing investor optimism that intensity may be easing. The brokerage said its analysis of key operating metrics across players shows that Asian Paints has underperformed peers across several indicators.
It added that while the pace of new dealer acquisitions may moderate, new entrants like Birla Opus and JSW Paints are expected to remain aggressive in pushing sales to dealers, especially heading into the festive season. This is likely to keep pricing and growth pressures intact.
CLSA also noted that Asian Paints continues to trade at a premium valuation compared to peers, despite underperforming on growth. It said this disconnect makes the risk-reward less attractive, particularly as competition remains fierce in both decorative and industrial segments.
Disclaimer: The views and recommendations made in this article are those of CLSA. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
