Asian Paints Share Price Plummets 6.6% Following Disappointing Q3 Results
The stock of Asian Paints, India's leading paint manufacturer, faced intense selling pressure on Wednesday, January 28, with its share price plunging as much as 6.6% in early trading to hit ₹2,451. This dramatic drop positioned Asian Paints as the worst performer on the Nifty 50 index, reflecting investor disappointment with the company's December-quarter financial performance.
Q3 Financial Performance: Profit Decline Amid Revenue Growth
Asian Paints reported a consolidated net profit of ₹1,073.92 crore for the December quarter, marking a 4.83% year-on-year decline from ₹1,128.43 crore in the same period last year. This profit drop was primarily attributed to exceptional items, including costs associated with implementing the new labour code and an impairment loss in a subsidiary.
Despite the profit contraction, the company's revenue from operations showed resilience, increasing by 3.71% to ₹8,867.02 crore from ₹8,549.44 crore a year earlier. The quarter included exceptional expenses of ₹157.61 crore, comprising a one-time gratuity-related charge of ₹63.74 crore and an impairment loss of ₹93.87 crore on intangibles related to the White Teak acquisition.
Profit before exceptional items and tax demonstrated stronger performance, rising 8.46% year-on-year to ₹1,646.70 crore. Total expenses increased by 3.12% to ₹7,447.07 crore during the quarter.
Stock Performance and Market Reaction
The sharp decline in Asian Paints' share price represents a continuation of recent weakness, with the stock having already slipped around 3% in the previous trading session. This brings the cumulative decline over two consecutive days to approximately 9.3%.
Asian Paints is currently trading nearly 18% below its 52-week high of ₹2,985.50, which was reached in December 2025. The stock's 52-week low stands at ₹2,125, recorded in March 2025. On a longer-term basis, the stock has shown mixed performance:
- Up 10% over the past one year
- Up 5% over the last six months
- Down 10% in the most recent one month
Analyst Perspectives and Investment Recommendations
Leading brokerage firms have adopted cautious stances following the Q3 results, though they maintain varying degrees of optimism about the company's future prospects.
Motilal Oswal reiterated its neutral rating on Asian Paints with a target price of ₹2,950, suggesting a potential 20% upside from current levels. The brokerage reduced its earnings-per-share estimates by 1–3% for fiscal years 2026 through 2028, citing sustained demand softness and intense competitive pressures in the paint industry.
"Competition is expected to remain high even as demand improves gradually," Motilal Oswal noted in its analysis. The brokerage highlighted that Asian Paints is focusing on innovation, branding, regionalisation, and execution to drive future growth. The company has maintained its EBITDA margin guidance of 18–20%, with plans to continue investing in marketing and brand-building initiatives.
HDFC Securities maintained its add rating with a target price of ₹2,800, indicating a 14% upside potential. The brokerage pointed to early signs of demand recovery despite ongoing competitive pressures, noting that "operational performance was largely in line with expectations."
HDFC Securities highlighted several positive aspects of the Q3 performance:
- Decorative volumes grew by 7.9%, though value growth was impacted by a shorter festive season and extended monsoon
- Strong momentum in the industrial segment
- Steady growth in overseas markets including Sri Lanka, the UAE, and Ethiopia
- Gross margins expanded 197 basis points to 44.4%
- EBITDA margin increased 94 basis points to 20.1%, supported by lower material costs and sourcing efficiencies
Both brokerages emphasized that Asian Paints continues to demonstrate operational strength despite challenging market conditions, with the company modelling a 10% revenue compound annual growth rate over FY26–28 and maintaining EBITDA margins around 19% in FY27 and FY28.
Disclaimer: The views and recommendations mentioned above are those of individual analysts or broking companies, and not of Mint. Investors are advised to consult with certified experts before making any investment decisions.
