Synopsis: The shares of this large cap paint stock was in the news today as multiple factors fueled the shares into momentum and made it jump almost 6%.
The shares of this company which is the largest home decor company in India and is 80 plus years old with major brands like Asian Paints, Apco, etc under its umbrella,soared upto 6 percent as multiple factors appeared in the news today and fueled the shares to gain.
With the market cap of Rs 2,49,583 crores , the shares of Asian Paints Ltd gave a closing at Rs 2,605 and gained almost 6 % by reaching a high of Rs 2,630 compared to its previous day closing price of Rs 2,486. The shares are trading at a PE of 65 whereas its median PE is at 71.
What are the multiple factors ?
Birla Opus CEO resigns
The CEO of birla opus Rakshit Hargave has quit the company after serving for 18 months according to the announcement this week and will be joining Britannia on December 15.
MSCI index weightage
According to the news reports , MSCI Standard index is going to increase the company’s weightage in its index from 15.5 % to 15.6% and among the eight stocks gaining higher weightage in MSCI’s index ,few of them are Asian Paints, Apollo Hospitals, Lupin and SRF.
Nuvama Alternative & Quantitative Research have said that asian paints is likely to see an inflow of $95 million due to the increase in its weightage.
Fall in the crude price.
Crude oil is one of the raw materials used in the paint industry and when the price of the crude oil starts declining , it indicates a potential fall in the company’s expense. The price of oil fell more than 1 % to its two week low because of the news of a possible global oil glut.
Brokerage firm Nomura upgrades to “buy” rating.
The brokerage firm has upgraded ratings from “neutral” to “buy” and have raised the targets from Rs 2,285 to Rs 3100 which is a potential upside of 25% from Tuesday’s closing levels.
Financials and others.
The Revenue from operations for the company stands at Rs8,939 crore in Q1 FY26 compared to Rs 8,970 crore in Q1 FY25 which is a decrease of 0.35 percent YoY basis . Similarly, the net profit stood at Rs 1,117 crore in Q1 FY26 from Rs 1.187 crore in Q1 FY25 giving a decline of 6%.
Asian Paints is India’s leading paint and décor company, ranking among the top ten decorative coatings firms globally.. Its extensive distribution network includes over 169,000 retail touchpoints across India, making its products widely accessible to customers nationwide.
Q2 FY26 Outlook
“The company is witnessing early signs of recovery in overall demand, with urban markets showing green shoots of revival and a good monsoon expected to boost rural consumption. Additionally, lower inflation levels and supportive government policies are likely to further aid demand conditions.
While competition in the industry is expected to remain intense, the company plans to focus on strengthening its innovation capabilities and enhancing brand saliency to navigate near-term uncertainties.
It also aims to build greater scale in its industrial business segment by leveraging its strong technical expertise and extensive distribution network. On the cost front, the company expects some easing in raw material prices, although it continues to closely monitor rupee volatility and its potential impact on input costs.”
Written by Leon Mendonca.
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