Asian Paints Shares Rise 5% After Strong Q2 Performance
Asian Paints Ltd. shares surged 4.6% on Thursday after the company delivered a strong September-quarter performance, with broad-based growth and sharp margin gains, prompting most brokerages to raise their target prices.
The company’s consolidated net profit surged 43% to Rs 994 crore in the July-September quarter, compared to Rs 695 crore in the corresponding quarter last year. The bottomline beat the Bloomberg consensus estimate of Rs 887 crore.
Revenue and Margin Growth
Revenue increased 6% to Rs 8,531 crore versus Rs 8,028 crore last year, also beating analyst estimates. The company’s ability to deliver strong revenue growth and margin expansion has been a key driver of its stock performance.
According to Jefferies research report, Asian Paints’ strong Q2 performance was driven by brand investments, innovation, and regional activations, alongside smart margin expansion. The brokerage firm maintained a ‘buy’ rating and raised its target price to Rs 3,300 from Rs 2,900, calling Asian Paints the king is back.
Brokerage Upgrades and Downgrades
Citi maintained a ‘sell’ rating, hiking its target price to Rs 2,250 from Rs 2,150, noting that growth and margin improvement in the second half will largely stem from a low base rather than easing competition.
Investec, while acknowledging the sharp beat across metrics, also maintained a ‘sell’ with a higher target price of Rs 2,285 (from Rs 2,050), citing rich valuations and limited margin upside beyond FY26 levels.
Stock Performance and Valuations
The scrip rose as much as 4.6% to Rs 2,897.10 apiece on Thursday, the highest since Nov. 7. It pared gains to trade 3.22% higher at Rs 2,859 apiece, as of 9:53 a.m. This compares to a 0.01% decline in the NSE Nifty 50 Index.
It has risen 15.53% in the last 12 months and 24.99% year-to-date. Total traded volume so far in the day stood at 0.99 times its 30-day average. The relative strength index was at 79.03 indicating it was overbought.
Analyst Estimates and Recommendations
Out of 38 analysts tracking the company, 13 maintain a ‘buy’ rating, seven recommend a ‘hold,’ and 18 suggest ‘sell,’ according to Bloomberg data. The average 12-month consensus price target of Rs 2,695.63 implies a downside of 5.4%.
Investors looking to buy or sell Asian Paints shares should consider the company’s strong Q2 performance, brokerage upgrades and downgrades, and analyst estimates and recommendations. They should also keep an eye on the Indian stock market trends and Nifty and Sensex news to make informed investment decisions.