Asian Paints took a sharp hit in the stock market, sliding nearly 5% after analysts trimmed their earnings per share (EPS) forecasts following the company’s Q3 results. While the paint giant reported better-than-expected volume growth and margins, concerns over revenue decline and increasing competition weighed on investor sentiment.
Analysts Stay Cautious Despite Q3 Beat
Nearly half of the 39 analysts tracking Asian Paints remain wary despite the company surpassing muted expectations in its December quarter performance. A breakdown of their recommendations paints a bearish picture:
- 18 analysts maintain a “sell” rating.
- 11 analysts suggest a “hold.”
- 10 analysts remain optimistic with a “buy” call.
The cautious stance reflects underlying concerns about revenue trends and competitive pressures in the industry.
Goldman Sachs Flags Revenue Decline, Cuts EPS Forecasts
Goldman Sachs reinforced its bearish outlook, reiterating a “sell” rating and setting a price target of ₹2,275. The brokerage firm cited a worsening revenue decline, attributing it to an unfavorable product mix and subdued near-term demand.
“The impact of increased competition is likely to intensify,” Goldman Sachs noted. As a result, the brokerage cut its EPS estimates for Asian Paints by 4% to 5% for the financial years 2025, 2026, and 2027.
Market Reaction and Sector Performance
Asian Paints’ stock performance contrasted with broader market trends, where select companies in the industrial and energy sectors posted gains. Here’s how some major players fared:
| Company | Value (₹) | Change (₹) | % Change |
|---|---|---|---|
| Bharat Petroleum Corporation | 263.70 | 7.75 | 3.03% |
| Oil and Natural Gas Corporation | 260.40 | 6.30 | 2.48% |
| Trent | 5,887.40 | 137.10 | 2.38% |
| Bharat Electronics | 291.25 | 6.75 | 2.37% |
| Hindalco Industries | 597.35 | 13.40 | 2.29% |
While Asian Paints struggled, other players in the market saw a more positive day, with oil and gas companies leading the gainers’ list.
Investor Sentiment Remains Mixed
Despite the sell-off, some investors remain hopeful that Asian Paints can navigate the ongoing challenges. The company’s ability to maintain strong margins despite weak revenue growth signals operational efficiency. However, with competition heating up and analysts turning more cautious, the stock may face continued pressure in the near term.
