The stock of the country's largest paints company Asian Paints fell sharply in the trading session of Monday, november 11, 2024. As soon as the market opened, the stock of Asian Paints plunged 9.47 percent to Rs 2505. The stock is still trading at Rs 2530 with a decline of 8.63 percent. This is the first time since the year 2020 that the stock of Asian Paints is trading at this level.
Why did the stock of Asian Paints fall?
The quarterly results of Asian Paints in the second quarter of the financial year 2024-25 have been worse than the market estimates. In the second quarter, the company's revenue has declined by 5.3 percent. Asian Paints' sales have declined due to weak consumer sentiment, continuous rains and floods during monsoon. But it seems that the company has suffered a major loss due to increasing competition in the paints sector. After Birla Opus and JSW Paints entered this sector, competition in the paints industry has increased.
Brokerage house reduced the target
After the disappointing quarterly results of Asian Paints, brokerage houses have reduced or downgraded their target price on the stock. Nomura india has remained neutral on the stock and reduced its target price from Rs 2850 to Rs 2500. Jefferies has also reduced the target price on the stock to Rs 2100. That is, 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 stock is trading. According to CLSA, the stock will underperform and the brokerage house has given a target of Rs 2290.
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