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
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
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
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
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
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
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
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