asian paints shares: Asian Paints shares tumble 4% after disappointing Q1 numbers. Should you buy, sell or hold?

The consolidated revenue from operations stood at Rs 8,943 crore, falling 2.3% YoY over Rs 9,154 crore reported by the paint maker in the corresponding quarter of the previous financial year.

The paint maker reported its standalone net sales at Rs 7,853 crores for Q1FY25, falling 2.9%.

Here’s how brokerages viewed the result:

JP Morgan: Neutral | Target price: Rs 2,870

The global brokerage firm has maintained a neutral call on Asian paints and cut the target price to Rs 2,800 from Rs 2,870.The earnings were a miss on weak margin print and tepid revenue growth. Poor mix and subdued demand weighed on revenue. However, price hikes and rural segment to aid better growth from Q2 onwards. JP Morgan expects a negative share price reaction to this print.Goldman Sachs: Neutral| Target price: Rs 2,750

Global brokerage firm Goldman Sachs has maintained a Neutral view on the stock and cut its target price to Rs 2,750.

Commenting on Q1 performance, a sharp EBITDA decline was seen and headwinds are likely to continue going forward. The impact of increased competitive intensity likely to create further pressure going forward and a sharp growth slowdown may be seen, while the management expects a modest recovery ahead.

Motilal Oswal: Neutral| Target price: Rs 3,150

Motilal Oswal has a ‘neutral’ rating on the stock with a target price of Rs 3,150. The domestic brokerage firm stated that Asian Paints’ performance was disappointing on all fronts.

“We remain cautious for both value growth and margin in FY25/FY26. Despite a correction in the stock, competitive pressure still hovers around earnings,” said Motilal in its report.

There are no material changes to the brokerage firm’s EPS estimates. With the entry of new players with deep pockets and massive commitments to investments, the overall industry may see a shift in market share and cost structures. These factors will be the key monitorables in FY25.

Nuvama: Buy| Target price: Rs 3,450

Nuvama reckons that a double-digit volume growth shall return in the remainder of FFY25. Rural growth was faster for Asian Paints and could further accelerate given a broader recovery in rural consumption due to stimulus programs by Union and state governments. The impact of Birla Opus is not much on major paint players.

Q1 was weak due to heatwave and elections. Given the miss versus consensus, a slight near-term downtick in the stock can be considered a buying opportunity.

With this, Nuvama has a buy call on Asian Paints with a target price of Rs 3,450.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)