Share Market: Stock market traders are seeing some unimaginable results on screen. Some graph readings may not be as some experts think before. On a shocking turn, Asian Paints stock declines with a quick manner.

44% decline

Asian Paints reported a 44% (YoY) decline in Q2 profit to Rs 694 crore. Moreover, the company’s revenue stood at Rs 8,028 crore in Q2, a decline of 5.3% year-on-year. The company’s results have been much weaker than estimates, so the stock is seeing tremendous selling.

Impact after poor results

After the poor results of Asian Paints, many international brokerage houses have cut the target price of the company’s shares. American brokerage firm JP Morgan has downgraded Asian Paints to ‘underweight’ and reduced the target price of the stock from Rs 2,800 to Rs 2,400. CLSA maintained an ‘underperform’ rating on the stock of Asian Paints with a target of Rs 2,290, citing weak demand and sentiment. The brokerage firm believes that the company has also lagged behind due to increasing competition in the market. Nomura also cut the target price on Asian Paints stock to Rs 2,500 from Rs 2,850 and has a ‘neutral’ rating.

HORRIBLE NUMBERS !
Your favorite fund managers will tell you to buy Asian Paints, calling it a ‘decadal story.’
They’ll sell you on the idea of it being a consistent compounder, spinning tales of per capita paint consumption being among the lowest in India, promising this… pic.twitter.com/vIQB5w8LS9
— Prateek Madaan (@prateek_madaan1) November 9, 2024

Probable reasons behind decline

All brokerages, including Morgan Stanley and Jefferies, said Asian Paints faced challenges due to weak demand and increasing competition. At the same time, in the quarterly results, the company said that demand may see improvement in the second half of FY25.