Asian Paints: Prabhudas Lilladher keeps Hold rating with Rs 2,544 target

what happened

According to TradingView, citing a Prabhudas Lilladher research report on Asian Paints, analysts take a cautiously positive view of demand and margins in the second half. They point to steady demand in both rural and urban India, growth in the company's services business across paints, B2B, waterproofing and preventive maintenance, and possible gains from the VAE facility in new product development.

Sales of auto and general industrial paints have grown briskly, but analysts expect slower growth in auto paints now that the anniversary of GST cuts has passed. They expect competition to stay elevated as Birla Opus, JSW Akzo and JK Cement expand distribution and product ranges. Double-digit earnings growth is expected to continue over the next two quarters on strong festival sales and price increases, but margin volatility may stay high because of crude prices and supply chain disruptions.

The rating stays at Hold, and the target price is cut to Rs 2,544 from Rs 2,720. The estimate rests on a revenue and EPS CAGR of 9.9% over FY26–29 and a multiple of 42x September 2028 EPS.

why it matters

The report's central point is that the company's long-term earnings growth and recovery of its competitive edge depend heavily on the VAE facility's contribution to margins. The news concerns a single company, so its effect on the broad market is limited, though it matters for investors following the Indian paints sector.

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