Jefferies Upgrades Asian Paints Forecasts Turnaround with Target Price of 2830 Rupees

Asian Paints Receives Double Upgrade from Jefferies with Revised Target Price and Positive Outlook

Mumbai July Nine Twenty Twenty Five — Global brokerage firm Jefferies has issued a rare double upgrade on Asian Paints raising its rating from underperform to buy and setting a new target price of two thousand eight hundred thirty rupees This move signals a potential upside of approximately fourteen percent from current levels and reflects renewed confidence in the companys recovery prospects

Jefferies Sees Turnaround Potential

Asian Paints has faced multiple challenges in recent years including subdued demand rising competition and volatile input costs However Jefferies believes the worst may be over and that the company is positioned for a cyclical upturn

The brokerage highlights several key factors supporting its bullish stance

• Stabilization in rural demand and gradual recovery in urban markets
• Normalization of gross margins as raw material prices ease
• Slower growth trajectory for new competitor Birla Opus
• Attractive valuation relative to historical averages

Industry Challenges and Competitive Landscape

The paints industry has been under pressure due to inflationary headwinds and aggressive pricing strategies by new entrants Asian Paints which once held a dominant market share has seen increased competition particularly from Grasim Industries Birla Opus

Despite these challenges Jefferies notes that the competitive landscape is beginning to stabilize and that Asian Paints is well positioned to regain momentum

Valuation and Financial Outlook

Jefferies values Asian Paints at forty nine times its projected earnings for fiscal year twenty twenty seven a level it considers reasonable given the companys market leadership and brand strength

The brokerage expects volume growth in the domestic decorative segment to rise to high single digits over the next three years Consolidated revenue and earnings before interest taxes depreciation and amortization are projected to grow at compound annual rates of eight and eleven percent respectively through fiscal year twenty twenty eight

Market Reaction and Investor Sentiment

Following the upgrade Asian Paints shares rose by over one and a half percent in early trading reflecting investor optimism The stock had previously declined more than twenty five percent from its peak making it an attractive contrarian opportunity according to Jefferies

Other analysts have echoed similar views suggesting that the stock may be poised for a re rating if earnings begin to recover as expected

Strategic Initiatives and Growth Plans

Asian Paints is focusing on innovation and service differentiation to strengthen its market position The company is expanding its premium product portfolio and investing in digital transformation to enhance customer engagement and operational efficiency

It is also increasing its presence in adjacent categories such as waterproofing construction chemicals and home decor services

Conclusion

Jefferies double upgrade of Asian Paints marks a significant shift in sentiment toward the company After a period of underperformance the brokerage sees a path to recovery driven by margin improvement demand revival and strategic execution

With a revised target price and a favorable risk reward profile Asian Paints may be on track to reclaim its leadership in the Indian paints industry