shares tumbled sharply by 6.55 per cent in early trade on Wednesday, leading the pack of losers, after the company reported its December-quarter numbers, with investors reacting to a fall in profit and cautious commentary on demand.
The stock closed 4 per cent lower at 2,511.80 on the , touching a low of ₹2,451, compared with the previous close of ₹2,622.80.
The paint major posted a standalone net profit of ₹1,414.89 crore for the quarter ended December 2025, down 4 per cent from ₹1,476.22 crore a year earlier.
Revenue from operations, however, rose 3 per cent year-on-year to ₹7,624.50 crore, against ₹7,417.83 crore in the corresponding period.
Margins strengthen despite muted demand
While top-line growth remained modest, brokerages highlighted a strong showing on margins, aided by raw material cost deflation and premium product mix.
Nuvama Institutional Equities said Asian Paints delivered a resilient operational performance, noting that Q3 revenue growth of about 4 per cent year-on-year was broadly in line with expectations, while EBITDA growth of 9 per cent beat its estimates.
Decorative volumes grew 7.9 per cent, driven by premium products, waterproofing and industrial coatings, reinforcing the company’s premiumisation strategy.
The brokerage pointed out that gross margin improved to 44.4 per cent, a nine-quarter high, while EBITDA margin climbed to 20.1 per cent, the best in eight quarters, helped by softer raw material prices, efficiency gains and operating leverage.
Nuvama said it was trimming earnings estimates due to higher depreciation and pricing softness, but maintained its ‘buy’ rating with a target price of ₹3,390.
Motilal Oswal struck a more cautious note, cutting its earnings-per-share estimates by 1–3 per cent for FY26–28, citing prolonged softness in demand and elevated competitive intensity.
The brokerage said the company expects competition to remain high, even as demand improves gradually, and is focusing on innovation, branding, regionalisation and execution to drive growth.
It added that Asian Paints has retained its EBITDA margin guidance of 18–20 per cent, despite benign raw material costs, as it plans to continue investing in marketing and brand building.
Motilal Oswal said it is modelling a 10 per cent revenue CAGR over FY26–28, with EBITDA margins of around 19 per cent in FY27 and FY28, and reiterated a neutral rating with a target price of ₹2,950.
HDFC Securities said the company’s operational performance was largely in line with expectations. Decorative volumes grew 7.9 per cent, though value growth was impacted by a shorter festive season and an extended monsoon.
The brokerage highlighted strong momentum in the industrial segment, which lifted overall coatings performance, and steady growth in international operations led by Sri Lanka, the UAE and Ethiopia.
Gross margins expanded 197 basis points to 44.4 per cent, while EBITDA margin rose 94 basis points to 20.1 per cent, supported by material cost deflation and sourcing efficiencies, even as marketing spends remained elevated.
HDFC Securities said management has maintained guidance for mid-single-digit value growth and 18–20 per cent margins in the near term. It retained its add call on the stock at ₹2,800 target price, noting early signs of demand recovery despite ongoing competitive pressure in the sector.
Axis Direct revised its FY27 and FY28 estimates for Asian Paints downward, citing sustained weakness in demand and an increasingly competitive environment, and reiterated a cautious stance on the stock. The brokerage maintained its hold rating, and cut its target price to ₹2,700 per share from ₹2,990.
JM Financial maintained reduce rating at a lesser target price of 2,735, noting the management’s cautious stance on near-term demand, with mid-single-digit sales growth likely, driven by volumes of 8–10 per cent but offset by a negative price and mix impact of 4–5 per cent that could persist into FY27. While margins are expected to remain comfortable within the 18–20 per cent band on benign input costs, JM Financial said a sharp recovery in demand still appears elusive, prompting it to cut FY27–28 earnings estimates by 2–3 per cent. Elara Capital has maintained sell rating on the stock at 2,517 per share.
With Asian Paints navigating subdued consumption, seasonal headwinds and aggressive competition, market participants appear divided on whether the recent margin gains can offset slower growth in the coming quarters.