BENGALURU (Reuters) – Shares of Asian Paints fell as much as 4.5% in early trade on Thursday, a day after India’s no.1 paint company reported its steepest quarterly profit slide in three years, hurt by weak demand and price cuts.
Shares of Asian Paints were the second worst percentage loser on the benchmark Nifty 50, which was down 0.26% on the day. [.BO]
Out of 34 analysts covering Asian Paints, at least six downgraded its shares after the results, while at least nine cut price targets on the stock, LSEG IBES data showed.
The paint maker’s margins are expected to remain under pressure due to increased marketing spends to stave off rising competition in the sector, analysts at Antique and Systematix said. Asian Paints reported a profit below analysts estimates for the three months ending June 30, and revenue also slipped on “tough” demand conditions amid heat waves and India’s national elections.
So far this year, the stock has fallen 14.2%, lesser than smaller rivals Kansai Nerolac’s 16.3% slide and Berger Paints India’s 14.7% drop.
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Mrigank Dhaniwala)
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