Reduce Asian Paints; target of Rs 2464: Prabhudas Lilladher

Prabhudas Lilladher recommended reduce rating on Asian Paints with a target price of Rs 2464 in its research report dated January 27, 2026.

Broker Research

January 28, 2026 / 11:52 IST

Reduce

Prabhudas Lilladher's research report on Asian Paints

We cut our FY27/FY28 EPS estimates by 1.3% driven by 1) a continued subdued demand environment despite a favorable macro backdrop. 2) the new employee code, likely to raise employee costs by ~10–15 bps over FY27–28; and 3) intensified marketing and innovation-led spends, limiting margin expansion in an increasingly competitive market. Despite recent tax cuts, benign inflation and incremental gains in disposable income, paint demand has remained subdued indicating structural softness while intensifying competition is preventing any meaningful recovery for APNT We remain cautious on APNT due to. 1) sustained competitive intensity in decorative paints. 2) ~4-5% volume–value gap from an adverse mix (higher growth in Putty, Construction Chemicals and Waterproofing), limiting sales growth to mid-single-digit; and 3) sustained softness in Bath, Kitchen and Home Décor business.

Outlook

We estimate revenue/EPS CAGR of 5.4%/8.0% over FY26–28. Valuing the stock at 48xDec’27E EPS, we revise our TP to Rs2,464 (Rs2,448 based on 48xSept27 EPS earlier). APNT trades at 50.2x FY28 EPS, leaving little scope for a re-rating. Retain Reduce.

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