Asian Paints shares plunged over 2 per cent in the early trade on Monday after Nomura downgraded them to ‘neutral’ from ‘buy’ and cut the target price to Rs 798 from Rs 870 earlier.
Shares of Asian Paints were trading 2.11 per cent down at Rs 867.40 in the morning trade (at 10.09 am). The scrip opened at Rs 879.90 and has touched a high and low of Rs 881.15 and Rs 865.60, respectively, in trade so far. Later, the scrip ended the day 2.17 per cent down at Rs 866.85.
According to Thomson Reuters data, of the 37 analysts covering the stock, 18 have ‘buy’ rating on Asian Paints, 6 have ‘sell’ and 13 have ‘hold’ rating with median price target of Rs 870.
Nomura said, “We believe current valuations are expensive with not much earnings visibility once prices of crude stabilise.” The Japanese brokerage firm revised down revenue growth assumptions, sees improvements in EBITDA margins from FY2016 but not “significant expansion”.
For the quarter ended December 2015, Asian Paints registered a consolidated net profit of Rs 463.28 crore, up 25.83 per cent, against Rs 368.18 crore in the corresponding quarter a year ago.
In the past one year, the share price of Asian Paints jumped 6.75 per cent till March 15, whereas BSE Sensex plunged 13.67 per cent during the same period.
(With inputs from Reuters)