Post by : Badri Ariffin

Shares of Asian Paints continued their upward momentum on Thursday, rising more than 4% to touch Rs 2,897 in morning trade. The gains came on the back of the company’s stronger-than-expected Q2 results and renewed investor confidence. The stock had already surged nearly 6% on Wednesday after the earnings announcement.

Robust Quarterly Performance

For the July-September quarter, Asian Paints delivered a positive surprise across all major metrics. Domestic decorative volumes grew 10.9%, far exceeding the Street’s expectation of 4-5%. Net profit jumped 47% year-on-year to Rs 1,018 crore, aided partially by a one-off loss in the same period last year. Revenue rose 6.4% to Rs 8,531 crore, while EBITDA increased 21.3% to Rs 1,503 crore, with margins expanding by over 200 basis points to 17.6%.

Market Valuation and Investor Sentiment

With the recent gains, Asian Paints now holds a market capitalization of around Rs 2.73 lakh crore. The stock trades at a high price-to-earnings ratio of nearly 76, reflecting its premium positioning in the consumer discretionary segment. The dividend yield stands at 0.87%, adding a modest income component for investors.

Analyst Views and Mixed Sentiment

Brokerages have shown a mix of optimism and caution post-results. Jefferies kept a ‘Buy’ rating and raised the target to Rs 3,300, citing broad-based volume growth and market share gains. HSBC also maintained a ‘Buy’ call with a target of Rs 3,050, highlighting margin surprises and recovery in the core decorative segment. On the other hand, Goldman Sachs issued a ‘Sell’ rating with a Rs 2,500 target, noting challenges in maintaining momentum amid competitive pressures and mid-single-digit revenue growth guidance for FY26.

Asian Paints’ recent performance underscores its resilience in the competitive paints sector, driven by volume growth, brand strength, and consistent market presence.

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