Asian Paints Ltd. is on brokerages's radar after it reported a sharp rise in fourth-quarter profit and beat analyst estimates on revenue and operating performance, while its board recommended a final dividend of Rs 23 per share.
Asian Paints (Q4, Consolidated YoY)
- Revenue up 10.6% to Rs 9,247 crore versus Rs 8,359 crore.
- Ebitda up 24.4% to Rs 1,787 crore versus Rs 1,436 crore.
- Margin at 19.3% versus 17.2%.
- Net profit up 69.4% to Rs 1,172 crore versus Rs 692 crore.
Asian Paints Ltd expects volume growth of 8%-10% in FY27 as demand remains steady across rural and urban markets despite inflation concerns and higher prices. The country's largest paintmaker said it has seen encouraging demand trends in April and May and expects market conditions to support high single-digit volume growth through the current financial year.
Asian Paints won praise from most brokerages after reporting a stronger-than-expected Q4, with higher sales growth and margin resilience helping EBITDA beat estimates. However, analysts remain divided on whether the momentum can sustain amid intensifying competition and uncertain demand trends. Jefferies and Macquarie retained their Buy ratings with a target price of Rs 3,300 and Rs 3,000. On the other hand, Citigroup and Goldman Sachs maintained Sell ratings despite raising target prices.
Jefferies on Asian Paints
- Jefferies maintains a Buy rating on Asian Paints with a target price of Rs 3,300.
- The brokerage highlighted that domestic volumes touched a 12-quarter high, while the gap between volume growth and value growth remained modest.
- Management commentary remained positive on demand trends and volume growth.
- Jefferies expects the momentum in demand to continue and believes the worst of the pricing pressure is now behind the company.
Macquarie on Asian Paints
- Macquarie maintains a Buy rating on Asian Paints with a target price of Rs 3,000.
- The brokerage noted that Q4 EBITDA beat expectations, driven by stronger-than-expected sales growth.
- Management expects the recent price hikes of over 11% to gradually flow through into realizations.
- The company intends to offset cost pressures through tighter cost control and maintain standalone EBITDA margins in the 18–20% range during FY27.
- Macquarie expects the negative impact from product mix changes to remain limited at around 3–4%.
Citi on Asian Paints
- Citi maintains a Sell rating on Asian Paints and has raised its target price to Rs 2,500 from Rs 2,300.
- The brokerage described the quarter as strong but remains cautious on the broader setup, citing margin risks ahead.
- It has increased FY27-28 revenue estimates by around 11% to reflect recent price hikes.
- EPS estimates have also been raised by 3–6%, although Citi expects margin compression to persist.
- The brokerage believes competitive intensity across the paints industry will remain elevated.
Goldman Sachs on Asian Paints
- Goldman Sachs maintains a Sell rating on Asian Paints and has raised its target price to Rs 2,575 from Rs 2,275.
- The brokerage expects FY27 revenue growth to accelerate as recent price increases start reflecting in the financials.
- Management remains confident of maintaining margins within its guided range.
- However, Goldman Sachs believes macroeconomic headwinds and their impact on industry demand remain key monitorables.
- The brokerage has raised FY27 and FY28 EPS estimates by 13% and 9%, respectively, reflecting stronger-than-expected revenue growth and margin resilience.
HSBC on Asian Paints
- HSBC maintains a Hold rating on Asian Paints with a target price of Rs 2,550.
- The brokerage said Q4 performance was strong, aided by a low base and dealer pre-buying ahead of price hikes in March.
- Going forward, HSBC believes the demand trajectory will be critical as dealers unwind inventories.
- It also flagged downtrading risks amid a challenging consumption environment.
- The brokerage retains its Hold rating due to limited visibility on sustained demand recovery and a lack of near-term catalysts.
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