Asian Paints shares slip in trade post-Q3 result; take a look at brokerages' views

Asian Paints share price today NSE: Asian Paints shares slipped as much as six per cent to hit the day's low at Rs 3,048.6 on NSE in the early morning after global brokerages turned mixed post paint major's third quarter ended December 2023 (Q3 FY24) results.

Asian Paints share price target 2024: HSBC has maintained a buy call on the paint maker with a target price of Rs 4,020. Image: Pixabay/ Representational Image

Asian Paints share price target 2024, Asian Paints share price today NSE, Asian Paints Q3 results: Asian Paints shares slipped as much as six per cent to hit the day's low of Rs 3,048.6 on the NSE in the early morning deals on Thursday, January 18, after global brokerages' mixed views on the paint major after its third quarter (Q3 FY24) result announcement.

The counter slipped for the second consecutive day. It settled at Rs 3,173, down by Rs 69.3 or 2.14 per cent on the NSE.

Asian Paints reported a 34.46 per cent increase in its consolidated net profit at Rs 1,475.16 crore for the third quarter ended December 2023 (Q3 FY24), helped by softening of raw material prices and better efficiencies.

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The company had logged a net profit of Rs 1,097.06 crore during the October-December period a year ago, according to a regulatory filing by Asian Paints. Asian Paints's revenue from operations went up 5.4 per cent to Rs 9,103.09 crore during the quarter. In the year-ago period, it stood at Rs 8,636.74 crore.

The company has witnessed a "soft raw material environment and work on sourcing and formulation efficiencies driving margins," which helped in "improvement in gross margins by about 510 basis points in Q3 FY'24 as compared to Q3 FY'23," said an earnings statement from Asian Paints.

Its PBDIT (profit before depreciation, interest, tax, other income, and exceptional items) increased by 27.6 per cent to Rs 2,056.1 crore from Rs 1,611.4 crore, it added. The company's consolidated PBDIT margin during the third quarter of FY24 "increased by 400 bps to 22.7 per cent", it further said.

Asian Paints Director & CEO Amit Syngle said, "Growth was supported by the extended festive season, though we saw some moderation in demand in the latter part of the quarter. Both our auto OEM and general industrial coating businesses achieved sturdy revenue growth and good profit margins."

During the quarter, Asian Paints' revenue from international business was flat at Rs 779.1 crore on the back of macroeconomic headwinds and inflation in key markets in South Asia and Egypt. Read more

Asian Paints share price target: Brokerages mixed after Q3 report card

	Asian Paints
Brokerage	Rating	Target (INR)
CLSA	Reduce	3215
Morgan Stanley	Underweight	2600
JP Morgan	Neutral	3305
Jefferies	Underperform	2500
Citi	Sell	2640
HSBC	Buy	4020
Goldman sachs	Neutral	3300
Macquarie	Outperform	4000

HSBC has maintained a buy call on the paint maker with a target price of Rs 4,020, translating to an upside potential of 22 per cent, the highest among its peers.

"3Q decorative volume growth is strong at 12 per cent (c15 per cent 4yr CAGR) due to strong festive demand; the volume growth outlook is also strong. The margin expansion led to strong earnings growth of 35 per cent," the brokerage said in its note. According to the analysts, the margin outlook should dispel fear of price wars.

Jefferies has maintained an underperform rating on the counter, with a target price of Rs 2,500. According to the brokerage, Asian Paints' results missed forecasts due to lower-than-expected revenue despite a delayed festival and lower input prices that propelled gross margins (GM) to a multi-quarter high. It added that a focus on new products, brand investments, and supply initiatives signals a growth mindset.

(With PTI Inputs)

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