Asian Paints Q2 Review: Brokerages Split Despite Strong Numbers; Margins Shine But Competition Looms

Asian Paints delivered a strong September-quarter performance, with broad-based growth and sharp margin gains, prompting most brokerages to raise price targets even as opinions diverged on valuations and competitive risks.

The company's consolidated net profit surged 43% to Rs 994 crore in the July-September quarter, compared to Rs 695 crore in the corresponding quarter last year. The bottomline beat the Bloomberg consensus estimate of Rs 887 crore.

Revenue increased 6% to Rs 8,531 crore versus Rs 8,028 crore last year, also beating analyst estimates.

On the concall, Asian Paints said it expects mid-single-digit value growth ahead, driven by a 4–5% gap between value and volume growth and a stronger push in the premium and luxury emulsions segment.

The company noted stable raw material prices but cautioned that geopolitical uncertainties could affect input costs. Competitive intensity, it added, remains elevated, with the overall demand environment for paints still subdued.

Citi maintained a 'sell' rating, hiking its target price to Rs 2,250 from Rs 2,150, noting that growth and margin improvement in the second half will largely stem from a low base rather than easing competition.

Jefferies, on the other hand, remained bullish with a 'buy' rating and raised its target price to Rs 3,300 from Rs 2,900, calling Asian Paints "the king is back." It attributed the revival to brand investments, innovation, and regional activations, alongside "smart margin expansion." Jefferies expects premium valuations to sustain given the company’s strong franchise and long-term customer relationships.

Investec, while acknowledging the "sharp beat across metrics," also maintained a 'sell' with a higher target price of Rs 2,285 (from Rs 2,050), citing rich valuations and limited margin upside beyond FY26 levels.