Asian Paints shares rise after Q1; should you buy, sell or hold?

Jefferies has maintained a ‘Buy’ rating on Asian Paints and raised the target price to Rs 2,900 from Rs 2,830 per share. The new price implies an upside of 21 percent from the last close. The brokerage noted an improvement in decorative volume growth, which it sees as a key positive. Demand commentary from the company was encouraging, though the market remains competitive. Jefferies expects the recent correction in raw material costs to help absorb the impact of higher anti-dumping duties on titanium dioxide (TiO2). It views Asian Paints as a strong contrarian play, anticipating a recovery in volume growth ahead.

HSBC also retained its ‘Buy’ call on Asian Paints but cut the target price to Rs 2,800 from Rs 2,900. The brokerage pointed to emerging green shoots in demand, although early monsoons have created a push-pull dynamic. It expects the company to benefit in the second quarter from an early festive season. While higher TiO2 prices remain a concern, these could be balanced out by softer prices for other raw materials. HSBC has lowered its FY27 and FY28 revenue and EBITDA estimates by 1–3 percent but continues to maintain a positive view, expecting a broadly stable competitive environment over the medium term. It forecasts a 12 percent EBITDA CAGR over FY25–28.

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The paints industry saw a modest recovery this quarter, supported by improved urban demand, though June monsoons tempered momentum. Asian Paints reported a 0.2 percent dip in India coatings revenue. The domestic decorative paints segment posted a 3.9 percent volume growth, while revenue declined 1.2 percent. Industrial coatings grew 8.8 percent, led by strong performance in the auto and protective segments. Operating margins were slightly lower year-on-year due to higher sales and marketing spends.

The home décor business remained muted amid weak retail consumption, though the Beautiful Homes Stores performed well. International markets delivered robust growth, with revenue up 11.1 percent on a like-to-like basis and 20.4 percent in constant currency, driven by strong performance in the Middle East and South Asia. "We remain confident in the long-term potential of the home décor and paints industry, and continue to invest in innovation and brand strength," said Amit Syngle, MD & CEO, Asian Paints.

Asian Paints shares have gained 5 percent since the beginning of the year.

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