Asian Paints shares fall nearly 5% after analysts cut EPS targets further post Q3

18 out of the 39 analysts have a “sell” rating on the stock, while the number of analysts with a “hold” and “buy” recommendation on Asian Paints stood at 11 and 10 respectively.

Asian Paints reported results during market hours on Tuesday, February 4, where both volume growth and margins were ahead of already subdued expectations.

Goldman Sachs has a “sell” rating on Asian Paints with a price target of ₹2,275.The brokerage said that the company’s revenue decline worsened driven by deteriorating mix, and it expects the near-term demand to remain subdued.

The impact of increased competitive intensity is also likely to increase, according to Goldman Sachs, who has cut Asian Paints’ Earnings Per Share (EPS) estimates for financial year 2025, 2026 and 2027 by 4% to 5%.

Morgan Stanley remains “underweight” on the stock with a price target of ₹2,358.

The brokerage said that while margins were better than expectations, the focus will be on recovery in volume growth.Asian Paints’ management remains cautiously optimistic on the near-term recovery in demand, while it continues to invest behind brands.

CLSA has maintained its “underperform” rating on the stock with a price target of ₹2,047, which is among the lowest on the street.

Jefferies has the lowest price target for Asian Paints at ₹2,000 with an “underperform” rating.

The brokerage expects margins to remain between 18% to 20% in the medium-term but demand will recover only gradually.

As a result of this and potential pressures in Q4 as well, Jefferies has cut Asian Paints’ EPS estimates by 4% to 8%.

Macquarie though is one of the 10 who have an “outperform” rating on Asian Paints. It expects demand momentum to remain weak for the next two quarters and that clarity on growth remains key for the performance going forward.

Shares of Asian Paints have opened 4.4% lower on Wednesday at ₹2,250. The stock had ended 2.5% higher on Tuesday post the results announcement.