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Asian Paints share price tumbles 5%—Will it drop to ₹2,000 or bounce back?

Muted demand, rising competition, and a weak festive season impact Asian Paints—What’s next?

Could Asian Paints Shares Fall to Rs 2,000? Brokerages Weigh In

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.

Also read: Tata Power Q3 Results 2025: Steady Growth or Just Meeting Expectations?

Asian Paints Q3 FY25 results

MetricQ3 FY25Q3 FY24Change (%)
Net profit₹1,128 crore₹1,475 crore-23%
Revenue₹8,549 crore₹9,103 crore-6%
Decorative business volume growth1.60%
International business revenue₹818 crore₹779 crore5%
Bath fittings revenue₹87.6 crore₹85.4 crore2.6%
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.

Also read: Castrol India Stock Rises 9% After Impressive Q4 Results

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:

BrokerageRatingTarget Price
JefferiesUnderperform₹2,000
Goldman SachsSell₹2,275
CLSASell₹2,047
ICICI SecuritiesReduce₹2,200
Motilal OswalNeutral₹2,550
MacquarieOutperform₹2,650

Most analysts agree that competition will intensify in H1 FY26, potentially affecting Asian Paints’ margins and pricing power.

Also read: Bharat Electronics Stock Rises 4% – What’s Fueling the Rally?

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:

  1. Urban demand recovery post-Q1 FY26.
  2. Competitive pricing strategies and new entrants.
  3. 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.

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