Asian Paints slips 3% as Q3 margins decline to 15.6%

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Shares of Asian Paints fell over 3 percent intraday on Tuesday as it posted weak December quarter results with margins declining 120 basis points to 15.6 percent. Higher input cost dragged gross margins sequentially by 230 basis points to 41 percent. Gains from low cost inventory of earlier quarter waned out and this quarter saw rise in input costs.

Don't miss: CIMB sees downside risk to Asian Paints' volume growth 

Credit Suisse lowered target price to Rs 470 from Rs 481 as it reduced earnings estimates by 3 percent to build in marginally lower gross margins.

Motilal Oswal has a neutral rating on the stock with a target price of Rs 465. “Quarterly volatility of its performance has increased significantly in the last two years. Spike in raw material costs and currency depreciation constitute key downside risks,” it said in a note.

Its raw material cost jumped 17.35 percent to Rs 1,845.21 crore in the third quarter of FY14. Meanwhile, Asian Paints implemented yet another average price hike of 2.1 percent from February across its product portfolios owing to rise in input costs. This takes the cumulative price hike in FY14 to 6.2 percent, thereby displaying strong pricing power of the company.

The country's largest paint company by assets, disappointed street on every parameter. Its third quarter consolidated net profit fell 1.76 percent year-on-year to Rs 329.3 crore, dented by weak demand for industrial paint and high raw material cost. Consolidated total income grew 13.2 percent to Rs 3,452 crore in the quarter ended December 2013 from Rs 3,049.6 crore in a year ago period.

At 11:39 hrs, the stock was quoting at Rs 475.15, down Rs 14.95, or 3.05 percent on the BSE.