The shares of Asian Paints Limited are trading at ₹2666.00 levels, and are close to their 52-week low of ₹ 2599.35. Paint stocks were under pressure due to a spike in crude oil prices amid the Russia-Ukraine war.
In addition, the share price of the company started falling after Aditya Birla Group firm Grasim Industries doubled the CAPEX for its foray into the paints business to ₹10,000 crores and said that it expects to start production from the fourth quarter of 2023-24.
Moreover, the company’s results failed to impress the D-Street. Asian Paints reported 0.5% year-on-year growth in consolidated profit at ₹ 874 crores for the quarter ended March 2022 as higher input costs pressured operating profit margins. Further, it had an exceptional loss of ₹ 115 crores.
HDFC Securities has a sell call on the shares with a target price of ₹ 2550, indicating a downside of 4.35%.
Axis Securities was impressed with the overall performance of the company in Q4FY22 despite the challenging environment of weak consumer sentiments and inflation across the raw material basket. It said that the management continues to focus on its execution capabilities towards increasing distribution reach, launching breakthrough innovative products, and expanding the Home Décor portfolio.
“The near-term challenge still persists and we would wait to see if the visibility of the near term performance sustains before we change our rating to BUY,” said the brokerage as it maintained a hold rating and an unchanged target price of ₹ 3,200 apiece.
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