Jefferies voiced concerns about Asian Paints’ widespread underperformance and competitive pressures, while Morgan Stanley pointed to weather-related effects and demand issues.
On November 11, Asian Paints’ stock dropped more than 9% after a number of brokerages voiced dissatisfaction with the company’s poor Q2FY25 results in the face of a difficult demand environment and heightened competition.
The stock was down more than 7% at Rs 2,565 at 9:20 AM. It has underperformed the Nifty 50, which has increased by 10% over the same time period, with a loss of around 25% so far this year.
Due to the company’s notable operating miss, JPMorgan downgraded Asian Paints to ‘Underweight’ and lowered its target price from Rs 2,800 to Rs 2,400. In Q2FY25, the company’s profit-before-depreciation, interest, and tax (PBDIT) margin decreased from 20.3 percent to 15.5 percent. CEO Amit Syngle stated, “Operating margins were impacted by the price reductions taken last year, higher material prices and increased sales expenses.”
