Mon Nov 11 06:04:47 UTC 2024: ## Asian Paints Stock Plunges 9% After Disappointing Q2 Results
**Mumbai, India:** Asian Paints’ share price plummeted by 9% in early trade on November 11, 2024, following disappointing July-September 2024 quarter results that led multiple brokerages to downgrade the company and cut their target prices.
The dismal performance, marked by a 0.5% decline in total volume against anticipated 6-8% year-on-year growth, coupled with a near-halving of net profit and a significant drop in margins, triggered the downward trend. Analysts attribute this to intensifying competition and uncertainty surrounding the company’s future outlook.
The share opened at ₹2578 on the BSE, quickly falling to a 52-week low of ₹2511.65, representing a 9% drop from the previous close. The company’s market capitalization consequently shrunk to ₹2.42 trillion.
Adding to the downward pressure, several brokerages revised their ratings and target prices for Asian Paints. Jefferies maintained its ‘Underperform’ rating, reducing the target price to ₹2,100, a 24% discount from the stock’s closing price on November 8. The brokerage expressed concern about the competitive landscape, deeming it a dampener for the company’s future prospects.
JP Morgan downgraded the rating from ‘Neutral’ to ‘Underweight’, lowering the target price from ₹2,800 to ₹2,400. The firm highlighted the first decline in domestic decorative paint volumes in a decade, excluding the impact of the COVID-19 pandemic. Although the industry witnessed a broad decline in demand in recent quarters, Asian Paints reportedly lagged behind its competitors. JP Morgan adjusted its FY25-27 EPS estimates for Asian Paints downwards by 10% to 12%.
While Nomura retained its ‘Neutral’ rating with a target price of ₹2,500, Morgan Stanley and CLSA both issued ‘Underweight’ and ‘Underperform’ ratings respectively, setting target prices of ₹2,522 and ₹2,290 respectively.
Asian Paints’ stock has already tumbled by 19% from its recent peak of ₹3,422. Management acknowledges the challenging demand environment, further exacerbating existing market sentiment. The company’s stock performance remains under close scrutiny as investors anxiously await further developments.
First Piper 