Asian Paints Q1 Results: Brokerages Raise Price Targets; Shares Fall

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Analysts raised target prices for Asian Paints Ltd. on account of improving demand and market share gains even as concerns over rising input costs remain.

India’s largest paintmaker saw its profit and revenue fall sequentially in the quarter ended June but meet the consensus estimates of analysts tracked by Bloomberg. Its margin also contracted even as the company hiked prices to offset raw material inflation.

Amit Syngle, managing director and chief executive officer at Asian Paints, however, said the company’s domestic decorative business more than doubled its volume. “The business registered strong CAGR in value and volume in comparison with Q1FY20, which was a normal quarter.” The industrial and home improvement businesses, too, doubled revenue on last year’s low base. International businesses registered strong double-digit revenue growth.

Shares of Asian Paints fell as much as 1.88%, the most in nearly a month, to Rs 3,099 apiece. Of the 42 analysts tracking the company, 19 have a ‘buy’ rating, 10 suggest a ‘hold’ and 13 recommend a ‘sell’, according to Bloomberg data. The average of 12-month consensus price targets implies a downside of 4.1%.

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