Mon Nov 11 19:06:58 UTC 2024: ## Asian Paints Shares Plunge 9.5% After Disappointing Q2 Results

**Mumbai, India** – Asian Paints, India’s leading paint and decor company, saw its shares drop by 9.5% on Monday, reaching their lowest point since April 2021. This dramatic decline followed the company’s disappointing financial results for the September quarter (Q2), which fell short of analysts’ expectations across all metrics.

The company attributed the weak performance to several factors: softened demand, material price inflation, and a decline in the decorative and coatings business in the domestic market. This resulted in a significant hit to profitability.

Analysts reacted to the news by revising their target prices for the stock downwards.

Nomura, a Japanese brokerage firm, lowered its target price to ₹2,500 per share while maintaining a ‘Neutral’ rating. They pointed to a decline in volumes by 0.5% year-on-year (YoY), underperforming peers who saw growth of around 3-4%. Sales and EBITDA also declined sharply by 5% and 28% YoY, respectively.

Morgan Stanley also retained its ‘underweight’ rating, reducing its target price to ₹2,522 per share. They cited subdued demand, extended rains, and floods as contributors to the missed revenue and margin targets.

Jefferies maintained its ‘Underperform’ rating with a target price of ₹2,100, noting significant misses across the profit and loss (P&L) heads.

JPMorgan downgraded Asian Paints to ‘Underweight’ and slashed its target price to ₹2,400 from ₹2,800, following the company’s significant operating miss.

CLSA maintained its ‘Underperform’ rating and reduced the target price to ₹2,290, attributing the sales growth lag to weaker consumer sentiment compared to competitors.

Despite the challenges, Asian Paints CEO Amit Syngle expressed optimism about a margin recovery in the coming quarters due to expected softening in material prices and recent price increases.

**Key Highlights:**

* Asian Paints shares dropped by 9.5% on Monday.
* Q2 results missed analyst expectations due to weak demand, material price inflation, and a decline in the decorative and coatings business.
* Several brokerages lowered their target prices for the stock, with some maintaining an ‘Underperform’ rating.
* Despite the current challenges, Asian Paints expects margins to recover in the coming quarters.

**Disclaimer:** This article is for informational purposes only and does not constitute investment advice. Investors should consult with certified financial professionals before making any investment decisions.

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