Shares of Asian Paints fell to their 52-week low for the second straight session on Tuesday. Amid the ongoing correction after Q2 earnings, the stock of Asian Paints has slipped below Rs 2,500 for the first time in over three and a half years. The stock touched an intra day low of Rs 2,484 on April 5, 2021. After that session, the stock has traded above Rs 2,500 mark till date. In the current session, Asian Paints stock slipped 1.95% to its 52-week low of Rs 2493.05 on BSE. On Monday too, the stock made a yearly low of Rs 2,507 on BSE after Q2 earnings disappointed Dalal Street.
Total 0.68 lakh shares of Asian Paints changed hands amounting to a turnover of Rs 17.02 crore. Market cap of Asian Paints stood at Rs 2.39 lakh crore. Asian Paints shares have a one-year beta of 0.5, indicating very low volatility during the period.
In terms of technicals, the relative strength index (RSI) of Asian Paints stands at 14.7, signaling it's trading in the oversold zone. Asian Paints stock is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
Brokerages are mostly bearish on the prospects of the stock.
Global brokerage Jefferies has maintained its 'underperform' rating on Asian Paints with a price target of Rs 2,100.
Jefferies said it remained concerned on competition which has also blurred the future outlook for the company.
JPMorgan downgraded Asian Paints to 'underweight' from 'neutral'. It trimmed its price target to Rs 2,400 from Rs 2,800 earlier. The brokerage said domestic decorative paint volumes fell for the first time in the past decade, excluding the Covid-19 pandemic.
Brokerage Prabhudas Lilladher has retained its reduce call on the stock and trimmed its price target to Rs 2230 against Rs 2605 earlier.
"We cut FY25/FY26/FY27 EPS by 16.4%/18.4%/18.3% given 24.4% decline in 2Q colidated PAT and muted outlook for 2H25. Asian Paints volume decline of 0.5% indicates some loss of market share as most competitors have grown volumes by 3-4%. While it is too early to cite any impact of Birla opus on the market dynamics, competitive intensity is on the rise, which has also forced Asian Paints to give higher discounts to trade to sustain their retrun on investment. We believe Asian Paints will sustain more incentives to trade as this has been its biggest strength over the years. While we expect sequential volume recovery to set in, Asian Paints guidance for 2H seems weak given high base and heightened competition. We believe regaining lost share might be tough given changed competitive dynamics," said Prabhudas Lilladher
"However, we expect situation to improve from FY26 onwards and factor in 6.7% revenue growth and 5.6% PAT growth (impacted by higher capex and depreciation) over FY25-27. APNT trades at 51.5x FY27 EPS. We cut DCF based-target price to Rs 2230 (Rs 2605 earlier). Re-Rating seems a long drawn affair given likely impact of Birla opus and rich valuations. Retain Reduce," added the brokerage.
Morgan Stanley is 'underweight' on Asian Paints with a price target of Rs 2,522, highlighting product mix, rising rebates, employee costs and higher selling expenses as the key monitorables.
CLSA too has a 'underperform' rating on Asian Paints with a price target of Rs 2,290.
Asian Paints' consolidated net profit slipped 42.4% in the September 2024 quarter year-on-year (YoY) to Rs 694.6 crore against Rs 1,205.4 crore posted in the corresponding quarter of the previous fiscal year. Sales fell 5.3% to Rs 8,003 crore in Q2 from Rs 8,451.9 cr in the corresponding quarter of the previous fiscal. EBITDA slipped 27.8% to Rs 1,239.5 crore in the last quarter from Rs 1,716.2 crore. Margins fell 480 bps to 15.5% on a YoY basis.
Asian Paints announced an interim dividend of Rs 4.25 for FY25. The board fixed the record date to determine the entitlement of shareholders for interim dividend as November 19 and the dividend will be paid to the shareholders on or after 28th November 2024.