Asian Paints shares in focus as Jefferies, Goldman Sachs, other brokerages cut target prices after Q2 results. Buy, sell or hold?

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ETMarkets.com

Asian Paints shares: Multiple brokerages cut their targets despite the company reporting a 7% YoY rise in Q2 profit. 

Asian Paints’ revenue from operations increased around 17% YoY to Rs 9,977 crore during the July-September quarter of FY27, while total expenses grew 19%. The company’s CEO Amit Syngle noted that the operating environment this year has been marked by sharp raw material inflation and material availability constraints driven by geopolitical disruptions, the full impact of which was felt in Q2.

“We calibrated price increases and absorbed part of the cost inflation to protect consumer demand in this challenging environment, resulting in standalone EBITDA margins of 17.1% in a quarter that typically has a lower mix and margin profile,” Syngle said. With inflationary pressures showing little sign of easing, the executive added that Asian Paints is implementing a further round of staggered price increases in the coatings business, while intensifying its cost-efficiency initiatives.

Also read | Asian Paints Q2 Results: Net profit rises 7% YoY to Rs 1,068 crore; firm announces Rs 5.75/share dividend

Along with the Q2 results, Asian Paints declared an interim dividend of Rs 5.75 per share of Re 1 face value for FY27, with November 4 (Wednesday) set as the record date to determine eligible shareholders. The said dividend will be paid by November 13 (Friday) to those shareholders who own the shares as on the record date.

Jefferies on Asian Paints share price

Jefferies maintained its ‘Buy’ rating on the shares of Asian Paints but reduced its target price to Rs 3,025 apiece from Rs 3,350 apiece. The latest target price implies more than 31% upside potential from the stock’s previous closing price of Rs 2,302 apiece on NSE.

The international brokerage noted that the company’s revenue growth remained strong, led by product price hikes, while a shift in the festive season partially impacted volume growth. This should improve in the coming quarter. Competition remained intense, while product pricing lagged cost inflation, keeping margins under pressure, the brokerage added.

Jefferies said that better mix, festive demand, and calibrated price hikes underpin a margin improvement in the second half of FY27, though RM volatility remains the key risk. Backward integration will likely help margins in the medium term, it added, while tweaking earnings estimates.

Goldman Sachs on Asian Paints share price

Goldman Sachs maintained its ‘Sell’ rating on the shares of Asian Paints, but slashed its target price to Rs 2,375 apiece from Rs 2,725 apiece, implying only 3% upside potential. The international brokerage noted that revenue growth beat estimates but EBITDA was lower than expectations, ET Now reported.

It highlighted that the company’s reiterated full-year FY27 EBITDA margin guidance at 18-20%, and an additional 3.5% price hike is expected in the third quarter to aid margin recovery.

Systematix on Asian Paints share price

Systematix Institutional Equities maintained its ‘Buy’ rating on the shares of Asian Paints but slashed its target price to Rs 2,885 apiece from Rs 3,285 apiece. The latest target price implies more than 25% upside potential from the stock’s previous closing price.

The brokerage noted that the company’s Q2 results were slightly below estimates. Management expects volume growth to trend at 8-9% going forward, with strong demand traction in the festive and wedding seasons. On pricing, a hike of 3.5% will take effect from November 1,and Systematix’ channel checks indicate Asian Paints will take another price hike of 3-4% effective November 21 likely across product categories, taking the cumulative hikes since April to 19-20%.

“Despite implementing significant price hikes, Asian Paints’ volume growth trajectory has held up firmly in the high single digit range, attesting to robust pricing power and brand equity as the market leader. We expect this trajectory of 8-10% volume growth to be maintained over FY27-FY29 as well, with the industry’s structural demand resilience (home maintenance an imperative),” the brokerage said.

While fresh price hikes coming in November lift the outlook for realizations, raw material (largely crude-linked) costs remain elevated, and Systematix expects GPMs in the second half of FY27 to also contract by 120 bps YoY.

Also read | Asian Paints says Middle East sales held strong even as 'full impact' of cost inflation was felt in Q2

Dolat Capital on Asian Paints share price

Dolat Capital also maintained its ‘But’ rating but slashed its target price to Rs 2,870 apiece from Rs 3,320 apiece. The latest target price implies around 25% upside potential. The company delivered in-line revenue while EBITDA and profit missed estimates, the brokerage said.

It expects the company’s margins to witness further pressure due to anti-dumping duty levy, however Industrial margins are likely to see sequential recovery. “Despite headwinds, we believe Asian Paints will be able to maintain margins in the guided range,” it added.

Asian Paints share price

Asian Paints shares have fallen more than 4% in a month and 16% in 2026 so far, with the stock overall being down around 9% in one year.

In the longer term, the shares of the paint-maker have delivered negative returns of 22% in three years and 26% in five years.