
Asian Paints shares took a sharp 5% dive on February 5, 2025, following a disappointing Q3 FY25 earnings report. The company posted a 23% year-on-year (YoY) decline in net profit to ₹1,128 crore, while revenue slipped 6% YoY to ₹8,549 crore. Analysts are now debating whether the stock could fall further to ₹2,000 or if a recovery is on the horizon.
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Asian Paints Q3 FY25 results
Metric | Q3 FY25 | Q3 FY24 | Change (%) |
Net profit | ₹1,128 crore | ₹1,475 crore | -23% |
Revenue | ₹8,549 crore | ₹9,103 crore | -6% |
Decorative business volume growth | 1.60% | — | — |
International business revenue | ₹818 crore | ₹779 crore | 5% |
Bath fittings revenue | ₹87.6 crore | ₹85.4 crore | 2.6% |
Kitchen business revenue | ₹102.7 crore | ₹100.1 crore | – |
Despite some growth in international, bath, and kitchen businesses, the company’s core decorative paints segment struggled, primarily due to subdued urban demand, consumer downtrading, and intensified competition.
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Why did Asian Paints’ stock price crash?
1. Weak festive season and muted demand
CEO Amit Syngle highlighted that the paint industry struggled with sluggish demand, especially in urban centres. While rural demand remained stable, urban consumers downtraded to cheaper alternatives, affecting premium product sales.
2. Intensifying competition
The entry of Grasim Industries’ Birla Opus into the decorative paints segment is increasing pressure. Additionally, Akzo Nobel’s acquisition by a strong player is expected to further shake up the industry.
3. Brokerage downgrades
Several brokerages have cut their price targets, anticipating a prolonged recovery:
Brokerage | Rating | Target Price |
Jefferies | Underperform | ₹2,000 |
Goldman Sachs | Sell | ₹2,275 |
CLSA | Sell | ₹2,047 |
ICICI Securities | Reduce | ₹2,200 |
Motilal Oswal | Neutral | ₹2,550 |
Macquarie | Outperform | ₹2,650 |
Most analysts agree that competition will intensify in H1 FY26, potentially affecting Asian Paints’ margins and pricing power.
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Should you buy, hold, or sell Asian Paints shares?
1. Bearish outlook
Analysts from Jefferies, CLSA, and Goldman Sachs believe Asian Paints shares could fall to ₹2,000, citing:
- Continued weak revenue performance.
- Consumer shift towards cheaper alternatives.
- Increasing promotional and marketing expenses to retain market share.
2. Bullish outlook:
On the other hand, Macquarie and Motilal Oswal expect a turnaround, arguing:
- Urban demand should recover in two quarters.
- Strong rural demand could help offset revenue declines.
- The company’s EBITDA margins (18-20%) remain stable.
3. Long-term fundamentals remain intact
Despite short-term concerns, Asian Paints is still India’s largest paint manufacturer, with:
- A market capitalization of ₹2.25 lakh crore.
- Leadership in brand strength and distribution.
- Expansion in home décor and industrial coatings.
Where will Asian Paints go next?
The next few quarters will be crucial in determining whether Asian Paints can fend off competition and bounce back. Investors should closely monitor:
- Urban demand recovery post-Q1 FY26.
- Competitive pricing strategies and new entrants.
- Raw material price trends, especially crude oil.
While some analysts predict further downside, others believe that rural demand and long-term fundamentals could support a recovery. Whether Asian Paints will sink to ₹2,000 or bounce back remains a critical question for investors.