Asian Paints shares: Three 52-week lows in three sessions, recovery on cards?

Shares of Asian Paints Ltd fell to their 52-week low for the third straight session on Thursday. The stock has been falling after the firm declared its Q2 earnings on November 9. Since then, the stock is down 18% in over a month. The stock touched an yearly low of Rs 2,266 in the current session. Total 1.92 lakh shares of Asian Paints changed hands amounting to a turnover of Rs 43.91 crore. Market cap of Asian Paints slipped to Rs 2.19 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 24.7, 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 a '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.

Jigar S Patel from Anand Rathi said, "Support will be Rs 2200 and resistance at Rs 2,500. A decisive move above the Rs 2,500 level may trigger a further upside of Rs 2,600. The expected trading range will be between Rs 2,150 to Rs 2,600 for the short-term."

A R Ramachandran, SEBI registered Independent analyst says, "Asian Paints stock price is bearish but also very oversold on the Daily charts with strong resistance at 2345. Investors should buy only if Daily close is above mentioned resistance for target of 2599. Next support will be at 2206."

Mandar Bhojane, Equity Research Analyst, Choice Broking said, "Asian Paints' stock has experienced a significant decline of over 33.27% since September 16, 2024, accompanied by a bearish breakdown from a symmetrical triangle pattern on the weekly chart indicating sustained selling pressure. Immediate support is positioned at Rs 2,260, and a breach of this level could trigger further downside movement toward Rs 2,100 and Rs 2,050. On the upside, Rs 2,400 serves as a critical resistance level; a sustained close above this level would indicate potential for a bullish reversal. Technical indicators further reinforce the bearish outlook. The Relative Strength Index (RSI) stands at 21.87, signaling extreme weakness and oversold conditions. Additionally, the Stochastic RSI shows a negative crossover, confirming the downward momentum. These readings suggest that the stock may continue to face selling pressure in the near term unless market dynamics change significantly. Despite being in the oversold zone, traders should exercise caution. A strong bullish reversal pattern, coupled with a close above Rs 2,400, could present a buying opportunity. Until then, the trend remains bearish, and any failure to hold the immediate support levels may deepen the correction. Investors are advised to watch key levels closely and align their strategies with prevailing market trends."

Brokerage Investec has a sell call on the Asian Paints stock with a price target of Rs 2320 which was breached today.

Brokerage Prabhudas Lilladher has a reduce call on the stock and trimmed its price target to Rs 2230.

"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.

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.