Asian Paints share falls over 3% after Goldman Sachs sees 29% downside on slowdown, Covid-19 concerns

Asian Paints share price fell in trade today as brokerage Goldman Sachs downgraded the stock to sell with a downside of 29.19% to the current market price. Share price of Asian Paints lost 3.65% to Rs 1,511 compared to the previous close of Rs 1,569 on BSE. The large cap stock has fallen 17.9% in last 10 days.

Asian Paints stock opened with a loss of 2% at Rs 1537 today.

Asian Paints share is trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Asian Paints share has lost 14.71% since the beginning of this year and gained 13.65% during the last one year.

Total 1.11 lakh shares changed hands amounting to turnover of Rs 16.91 crore on BSE. Goldman Sachs downgraded the stock to sell with a target price of Rs 1,111 compared to the current market price of Rs 1,569.

The brokerage forecasted FY22E & FY23 volume growth to be 1.5 times of real GDP growth (lower than long-term average of 1.7 times) as consumers are likely to push back re-painting given slowdown and COVID-19 concerns.

Goldman Sachs also expects volume growth to slow to an average of 6% over the next 3 years. It expects price/mix growth to fall to -4% in FY21E. Valuations of the stock look demanding at a FY22 P/E of 47 times versus our coverage average of 39 times with EPS CAGR (FY19-22E) potential of 15% (peers 12%), the brokerage said.