Asian Paints share price plunged 6% during the intraday after the Q3 results were announced. Multiple brokerages pointed to weak demand conditions, even as margins improved on lower raw material costs.
While Motilal Oswal and JM Financial remained cautious due to slow volume recovery, pricing pressure, and valuation concerns, Nomura, Nuvama Institutional Equities, and Jefferies stayed positive, citing strong margins, steady volume growth and performance in premium, industrial and B2B segments.
Asian Paints Q3 earnings highlights
Asian Paints reported around 4% year-on-year revenue growth in Q3FY26, while EBITDA rose close to 9%. Nuvama described the quarter as a “resilient performance”, Jefferies said volume growth remained “respectable” at around 8%, and Nomura pointed to improving demand trends towards the end of the quarter, even as other brokerages flagged muted near-term conditions.
Motilal Oswal on Asian Paints: ‘Neutral’
Motilal Oswal Financial Services Ltd. maintained a ‘Neutral’ rating on Asian Paints, stating that the December quarter showed limited progress on growth. The brokerage said volumes remained under pressure even though margins improved during the quarter. In its report, Motilal Oswal said the overall performance was “lacklustre”, pointing to slower recovery in decorative paint demand.
The brokerage noted that margin improvement was largely driven by lower raw material prices rather than stronger sales traction. It said pricing conditions remained difficult due to competition across the industry. Motilal Oswal said “competitive intensity remains high”, which continues to restrict near-term growth.
Motilal Oswal also trimmed its earnings estimates for the coming years, citing slower demand recovery. It said current valuations already factor in improvement that is yet to appear in volume trends. According to the brokerage, visibility on growth remains limited.
Motilal Oswal’s target price of about Rs 2,950 implies an upside of roughly 19% from the current market price. However, the brokerage said it prefers to wait for better volume traction before turning positive, retaining its Neutral rating.
JM Financial on Asian Paints: ‘Reduce’
JM Financial reiterated a ‘Reduce’ rating on Asian Paints after reviewing the December quarter results. The brokerage said the performance came in below expectations despite a weak base. It pointed to slower decorative paint volumes due to a shorter festive season and prolonged monsoons. JM Financial described the demand environment as “muted”.
The brokerage said value growth is likely to remain in the mid-single digits in the near term, with pricing pressure continuing due to competition. JM Financial noted that repainting activity has slowed, while spending has moved towards travel and hospitality. It said demand conditions continue to remain weak.
JM Financial also expressed concern over valuations, stating that Asian Paints continues to trade at elevated multiples despite slower growth. According to the brokerage, this limits the scope for meaningful upside. It said valuations offer “limited comfort” at current levels.
With a target price of around Rs 2,735, JM Financial sees an upside of about 10% from current levels. The brokerage said this does not compensate for demand risks and therefore retained its Reduce rating.
Jefferies on Asian Paints: ‘Buy’
Jefferies retained a ‘Buy’ rating on Asian Paints, stating that volume growth held up despite weak seasonal conditions during the December quarter. The brokerage said domestic volume growth moderated due to seasonality but still came in at around 8% year-on-year. In its report dated January 27, Jefferies said, “Domestic volume growth moderated, partly due to seasonal factors, but remained respectable at c8% YoY.”
The brokerage noted that revenue growth lagged volume growth during the quarter, while profitability remained strong. Jefferies said consolidated revenue growth was nearly half of volume growth, even as margins stayed at the upper end of management guidance. It added that “APNT reported c20% margin which is at the top-end of the guided range,” despite competition remaining intense.
Jefferies also pointed to steady performance across industrial, projects and premium product categories, supported by multiple company initiatives. According to the report, growth during the quarter was backed by brand spending, new product launches, services and focus on B2B segments. Jefferies said volume growth was “resilient in Q3 on the back of several initiatives,” even with a shorter festive season and extended monsoon.
On the outlook, Jefferies said demand conditions remained weak during the quarter, with improvement seen towards the end. The brokerage said management expects recovery to be gradual and believes current growth levels are reasonable given the environment. Jefferies quoted management as saying that “volume growth of 8–10% is good given the weak demand context,” while retaining its Buy rating with a target price of Rs 3,300. This implies xxx% upside.
Nomura on Asian Paints: ‘Buy’
Nomura too retained a ‘Buy’ rating on Asian Paints while acknowledging near-term pressure on volumes. The brokerage said margins remained strong and were at the upper end of management guidance. In its report, Nomura said margin performance continues to be “strong”.
Nomura noted improvement in demand trends towards the end of the quarter and into January. It said recent trends indicate better traction, supported by rural demand and premium product sales. The brokerage referred to January demand as “improving”.
The brokerage said Asian Paints continues to benefit from its brand strength, wide distribution reach and focus on premium products and services. Nomura expects earnings growth to improve gradually as demand stabilises. It said the company’s position remains “intact”.
Nomura’s target price of Rs 3,250 implies an upside of about 31% from current levels.. The brokerage said it remains comfortable with its Buy rating despite short-term weakness.
Nuvama on Asian Paints: ‘Buy’
Nuvama Wealth Management reiterated its ‘Buy’ rating on Asian Paints with a 12-month target price of Rs 3,390, implying an upside of nearly 37% from current levels. In its result update, Nuvama said the company delivered a steady December quarter, with revenue broadly in line with estimates and margins exceeding expectations. The brokerage titled its note “Resilient performance continues”.
Nuvama said consolidated revenue grew about 4% year-on-year, while EBITDA rose around 9%. Decorative volumes increased close to 8% despite festive compression and extended monsoons. The brokerage said gross margin reached a “nine-quarter high”, supported by lower raw material costs and efficiency gains.
The brokerage pointed to strong contributions from premium products, waterproofing and industrial and B2B businesses. Nuvama said demand from new housing, particularly in premium and luxury segments, supportedthe mix and profitability. It also noted that November and December exit growth was stronger, describing it as “healthy”.
While acknowledging weak industry demand and high competition, Nuvama said Asian Paints remains confident of gaining market share through new products, services and B2B expansion. The brokerage trimmed earnings estimates slightly due to depreciation and pricing softness but maintained its target price and Buy rating.
Conclusion
Brokerage views on Asian Paints remain divided after the December quarter results. Motilal Oswal and JM Financial are cautious on the back of weak demand and valuations, while Nomura and Nuvama continue to support the stock on strong margins and steady performance in premium, industrial and B2B businesses. As the stock reacted sharply to the results, upcoming quarters will be closely tracked for demand improvement, even as brokerages agree that profitability held up during the quarter, calling the performance “resilient”.