Asian Paints Target Slashed by 7% as Demand Woes Mount

CONSUMER-PRODUCTS

Overview

Prabhudas Lilladher has cut its rating on Asian Paints to 'Reduce' and lowered the target price to ₹2,464. The brokerage cited ongoing subdued demand, potential increases in employee costs, and intensifying market competition as key factors limiting margin expansion. Analysts remain cautious due to sustained competitive pressure and an adverse sales mix.

Valuation and Outlook

Looking ahead, Prabhudas Lilladher forecasts revenue and EPS Compound Annual Growth Rates (CAGRs) of 5.4 percent and 8.0 percent, respectively, for the period between FY26 and FY28. The firm has revised its target price (TP) for Asian Paints to ₹2,464, up slightly from its previous ₹2,448 target based on a September 2027 EPS. This new target is derived from a valuation multiple of 48 times the estimated December 2027 EPS. However, the stock currently trades at a considerable 50.2 times its FY28 EPS. This premium valuation leaves "little scope for a re-rating," prompting the firm to maintain its "Reduce" recommendation.

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