Asian Paints share price falls over 5% after weak Q3 results prompt analysts to cut target; Should you buy or sell?

Asian Paints share price dropped over 5% in early trade on Wednesday after the company’s weak Q3 results disappointed the Street, prompting analysts to cut target prices on the stock.

Asian Paints shares declined as much as 5.10% to ₹2,235.00 apiece on the BSE.

The largest paints maker in the country, Asian Paints, reported a 23.3% year-on-year (YoY) fall in its consolidated net profit for the third quarter of FY25 to ₹1,110.48 crore.

The company’s consolidated revenue from operations in Q3FY25 fell 6% YoY to ₹8,549.44 crore impacted by subdued demand conditions amid a weak festive season.

“In the near term, we remain cautiously optimistic on a recovery in demand conditions while we continue to invest in our brand and focus on innovation and customer centricity,” said Amit Syngle, Managing Director & CEO of Asian Paints.

The company expects volume growth to be in single digits going forward, while EBITDA margins are likely to be 18–20%. It expects some softening in raw material prices, while weakness in rupee remains a key concern.

Analysts cut Asian Paints share price target

Post the Q3FY25 weak performance by Asian Paints, Antique Stock Broking cut its earnings estimates by 3%, 6% and 7% for FY25, FY26 and FY27, respectively. It expects Asian Paints to deliver muted sales and earnings CAGR of 9% over FY25-27 due to headwinds on account of higher competitive intensity.

The brokerage firm maintained a ‘Hold’ recommendation on Asian Paints shares and cut the target price to ₹2,361 apiece from ₹2,527 earlier, based on 45x PER on FY27E earnings.

“Asian Paint’s (APNT) 3QFY25 performance was weak with decorative volume growing by 1.6% YoY while value declined by 6% impacted by weak demand sentiment during the festival season and consumer down trading. Over the medium term, profitability would be restricted due to higher rebates/ promotions and marketing spends,” Antique Stock Broking said.

According to Nuvama Institutional Equities, Asian Paints reported Q3FY25 revenue and EBITDA below consensus estimates.

“Decorative business (India) volumes inched up 1.6% YoY, but revenue declined 7.8% YoY mainly due to muted demand, downtrading and adverse product mix. International business clocked 17.1% YoY CC growth. Factoring in a weak demand outlook and continued urban stress, we are cutting EPS estimates for FY25–27 with a rollover to Q3FY27E,” Nuvama Equities said.

It maintained a ‘Buy’ rating on the stock but cut Asian Paints share price target to ₹3,000 apiece from ₹3,185 earlier.

At 9:30 AM, Asian Paints shares were trading 4.36% lower at ₹2,252.45 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.