Asian Paints share price extends fall after Q1 results; Should you buy, sell or hold? Check what brokerages have to say

livemint.com:

Asian Paints share price fell nearly a percent on Wednesday, extending its decline from a 4% fall witnessed in the previous session, after the company declared its Q1 results. The paint maker reported a consolidated net profit of ₹1,574.84 crore in the first quarter ended June 2023, recording a 52% growth from ₹1,036.03 crore in the corresponding quarter last year.

Asian Paints’ consolidated revenue from operations during Q1FY24 rose 6.6% to ₹9,182.31 crore from ₹8,606.94 crore, YoY. Sales in the international business declined by 1.4% to ₹695.1 crore from ₹705.2 crore on account of economic uncertainty, forex crisis and liquidity issues in key markets of Asia and Africa.

Read here: Asian Paints Q1 results: Net profit jumps 52% to ₹1,575 crore; revenue growth at 6.6% YoY With raw materials prices having deflated, analysts expect the company might consider price cuts going ahead. Some analysts have also flagged concerns over rising competition in the paint sector with the impending entry of Grasim would likely be weighing on incumbents’ minds while deciding the course of action in this regard.

Here’s what brokerages have to say on Asian Paints Q1 results: The brokerage house noted that with the entry of new players with deep pockets and massive commitments to investments, the overall industry may see a shift in demand and margin structure due to heightened competition. “We remain cautious as the paints segment may not enjoy higher multiples of the past.

It needs to be noted that the re-rating was a bigger driver of stock price appreciation for Asian Paints over the past five to six years, as the earnings CAGR has been in the 10-12% range," it said. It reiterated Neutral rating with a target price of ₹3,120 per share,