support@headlinenews360.com
Asian Paints Stock Crash: The stock of Asian Paints, the country’s largest paints company, fell flat in the trading session of Monday, November 11, 2024. As soon as the market opened, the shares of Asian Paints fell by 9.47 percent to Rs 2505. Still the share is trading at Rs 2530 with a decline of 8.63 percent. This is the first time after the year 2020 that the stock of Asian Paints is trading at this level.
Why did Asian Paints shares fall?
The quarterly results of Asian Paints in the second quarter of the financial year 2024-25 have been worse than market expectations. The company’s revenue has declined by 5.3 percent in the second quarter. Asian Paints sales have declined due to weak consumer sentiment, continuous rains and floods during monsoon. But it seems that the company has suffered major losses due to increasing competition in the paints sector. Competition in the paints industry has increased after the entry of Birla Opus and JSW Paints into this sector.
Brokerage house reduced the target
After the disappointing quarterly results of Asian Paints, brokerage houses have reduced or downgraded their target prices on the stock. Nomura India, while remaining neutral on the stock, has reduced its target price from Rs 2850 to Rs 2500. Jefferies has also reduced the target price on the stock to Rs 2100. This means that the brokerage house sees the possibility of further decline in the stock. JP Morgan is underweight on the stock and has reduced the target price to Rs 2400. Morgan Stanley has given a target of Rs 2522 around which the share is trading. According to CLSA, the stock will underperform and the brokerage house has given a target of Rs 2290.
disappointing results
Asian Paints’ revenue declined by 5.3 percent to Rs 8003 crore in the second quarter. Whereas the net profit of the company declined by 42.2 percent to Rs 694.64 crore. On the company’s disappointing results, CEO Amit Single said, operating margins have been impacted due to decisions taken to cut prices last year, higher material prices and increased sales expenses.
read this also
