Synopsis: The stock’s outlook reflects mixed sentiment, with some brokerages expecting margin recovery, stronger volumes, and potential upside, while others highlight intense competition and low-base effects. Recent earnings improvements support optimism, but sustained performance will depend on maintaining pricing power and market share in a highly competitive environment.
The Indian paints sector is valued at approximately USD 10.46 billion in 2025 and is projected to expand to USD 16.38 billion by 2030, growing at a robust CAGR of 9.38%. Growth is driven by booming construction, urbanization, and rising consumer demand for decorative and eco-friendly paints, with major players like Asian Paints dominating the market.
With a market capitalization of Rs 2,77,236.94 crore, the shares of Asian Paints Ltd were trading at Rs 2893.40 per share, increasing around 0.50% percent as compared to the previous closing of Rs 2879.10 apiece.
Brokerage Recommendations
Jefferies and HSBC turning more bullish on the paint stock signals growing confidence in its earnings outlook and market position. Their higher target prices of Rs 3,300 and Rs 3,050 suggest expectations of steady demand recovery, strong margins, and improved volume growth. With the stock at Rs 2893.40, the implied 7–15% upside adds positive sentiment for investors.
Jefferies highlighted that Asian Paints delivered strong domestic volume growth and continued to gain market share, driven by higher brand spending, new product innovation, and deeper regional outreach. Despite rising competition, the brokerage believes the company’s long-standing relationships and strong distribution network offer a durable competitive edge. With this confidence, Jefferies assigned one of the highest price targets.
Similarly, HSBC sees a strong recovery in Asian Paints’ core retail decorative segment, which has boosted margins more than expected. They believe this positive trend can be sustained, and their FY27 EPS estimate is 10% higher than what the market currently expects.
Other views
On the other hand, brokerages like Citi and Goldman Sachs remain bearish, highlighting several challenges ahead for the company. Citi believes any growth or margin is likely to improve in the second half of the year, as it mainly reflects a low base, not because of moderation in competitive intensity.
Goldman Sachs, despite acknowledging strong recent results, maintains a “sell” rating. The firm expects the company to struggle sustaining momentum in the second half, with EBITDA margins likely capped at 18–20% due to persistent competition.
The company delivered steady growth, with revenue rising 6.2% to Rs 8,531 crore in Q2FY26 from Rs 8,028 crore a year earlier. Profitability strengthened sharply, as net profit jumped 47% to Rs 1,018 crore versus Rs 694 crore in Q2FY25, reflecting better operating leverage and improved cost efficiencies.
Asian Paints’ OPM shows clear cyclicality, peaking at 23% in Jun-2023 and stabilising around 19–20% through late 2023 and early 2024. However, margins weakened to 15% in Sep-2024, reflecting cost pressures and competition, before improving to 18% in Jun-2025 and Sep-2025, indicating a gradual recovery.
Conclusion
Overall, Asian Paints’ strong Q2 performance, rising volumes, and broad global presence provide meaningful support to its long-term outlook. However, persistent competitive pressure and cautious views from global brokerages create a balanced risk–reward scenario. The stock’s upside potential depends on sustaining margin gains, defending market share, and proving that growth is driven by fundamentals rather than a low base.
Written by Abhishek Singh
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