Asian Paints Q1 Review: Analysts' Contrasting Calls On Cautious Outlook — Should You Trust The Bulls Or Bears?

Asian Paints Ltd.'s recent first-quarter results for the current financial year have painted a picture, calling in a wide range of reactions from brokerages. Jefferies and HSBC maintain 'Buy' ratings, with target prices of over Rs 2,500, signalling optimism on demand recovery.

On the other hand, Goldman Sachs, Citi, and UBS hold 'Sell' ratings, with target prices ranging from Rs 2,100 to Rs 2,250, based on the concern about persistent competitive intensity and valuation. Morgan Stanley stands with an 'Underweight' rating and a price target of Rs 1,909, also highlighting ongoing competitive pressures.

While some see the potential for a rebound driven by improving demand and strategic advantages, others remain wary of the sustained competitive pressures, margin challenges, and valuations.

Jefferies maintains its 'Buy' rating, raising its target price to Rs 2,900. The brokerage views the improvement in decorative volume growth as a key positive. While acknowledging the competitive market, Jefferies sees Asian Paints as a strong contra idea. They also believe that the correction in input costs should help offset the impact of increased anti-dumping duty on Titanium Dioxide (TiO₂), though near-term margins might still face pressure.

HSBC also reiterates its 'Buy' rating, despite the slight trim in its target price to Rs 2,800. Their assessment of Q1 results was broadly in line with expectations, and they too observe "green shoots" in demand. They note that an early monsoon has created some push-pull dynamics. They cite benefits from an early festive season in the second quarter.

Morgan Stanley maintains an 'Underweight' rating with a target price of Rs 1,909. The analyst's view is that while the company is focused on driving growth, competitive intensity will persist. They acknowledge early green shoots in demand but anticipate near-term volume and value growth to remain in single digits. While an early Diwali could bring a major part of festive demand in September, the overall outlook remains cautious.

Goldman Sachs maintains its 'Sell' rating, raising its target price to Rs 2,250. GS considers Q1 as an "in-line" quarter but emphasises that competitive intensity is likely to remain high. They point out that gross margins were impacted by mix deterioration, and management itself acknowledges the persistent competitive environment, expecting near-term volume growth to remain in single digits.

Citi also maintains a 'Sell' rating, hiking its target price marginally to Rs 2,150. Citi characterises Q1 as a "weaker-than-expected start" to financial year 2026. The analyst warns that sustained competitive intensity and recent mergers and acquisitions may lead to higher discounting, and increased marketing investments could result in further earnings downgrades or a de-rating of the stock.

UBS maintains its 'Sell' rating with a target price of Rs 2,100. The brokerage notes that Q1 delivered only marginally better revenue and Ebitda than consensus estimates. They believe that competition remains elevated, and the growth outlook is likely to stay dull.