Tue Nov 12 01:19:08 UTC 2024: ## Asian Paints Shares Plunge After Disappointing Q2 Results: “A Horror Film,” Says Analyst

**Mumbai, India** – Asian Paints shares have taken a nosedive following the company’s disappointing second-quarter results, with analysts calling the performance a “horror film” and a “major accident.” The company reported a 44% drop in profit and a 5% decline in revenue due to weak demand, further exacerbated by disappointing margin and domestic volume growth.

The dismal results have led to downgrades from several brokerage houses, and renowned analyst Anuj Singhal has declared the Q2 performance the biggest accident for Asian Paints shares. “The results are like a horror film. Volume, sales, EBITDA, and profit have all declined. I can’t remember seeing anything like this for Asian Paints before,” said Singhal, adding that the stock is likely to hit a new 52-week low.

“The market will now revalue Asian Paints,” he added.

The bleak outlook comes amidst a larger bearish market sentiment fueled by a combination of factors, including the disappointing results from HUL and a growing sense that valuations are outpacing corporate performance. Singhal has pointed out that the US election isn’t the primary driver for the Indian market’s downturn, as domestic factors are playing a more prominent role.

“Valuations have gotten ahead of themselves, and the results are lagging behind,” Singhal emphasized.

This sentiment is echoed by Jefferies, which has begun lowering its FY25 forecasts for Indian companies. The firm has downgraded estimates for 63% of companies, marking the most significant downgrade since 2020.

Technically, Asian Paints stock also appears weak, trading below all moving averages and breaking the March 2020 trendline, further compounding the negative outlook.

**Q2 Breakdown**

During the September 2024 quarter, Asian Paints reported a consolidated net profit of INR 694.64 crore, a 42.4% year-on-year decline from INR 1,205.42 crore in the same period last year. Revenue fell 5.3% to INR 8,003.02 crore from INR 8,451.93 crore.

Profit before depreciation, interest, and taxes (PBDIT) also dropped by 27.8% to INR 1,239.5 crore compared to INR 1,716.2 crore a year earlier. PBDIT margin, as a percentage of net sales, declined to 15.5% from 20.3% in the previous year.

The bleak Q2 results have sent a strong signal about the challenges facing the Indian paint industry, and the market’s response indicates that investors are seeking greater clarity and evidence of a turnaround in the coming quarters.

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