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Asian Paints share price: The brokerage has slashed the target price to Rs 2,425 from Rs 3,215 earlier, a steep 24.57 per cent cut.

Asian Paints’ stock opened lower on February 26 because several global financial research firms have reduced their target prices for the company. They’re concerned about increased competition in the paint sector, especially with Grasim Industries entering the market with their Birla Opus brand.

CLSA, one of these firms, has downgraded Asian Paints’ rating to ‘Sell’ from ‘Underperform’ and significantly reduced their target price from Rs 3,215 to Rs 2,425, which is a big drop of about 24.57%. They believe that Asian Paints will face tough competition from Grasim Industries in the near future, which could affect its growth and profit margins.

Despite this, CLSA thinks that Asian Paints might still maintain its market position in the long run. However, they’ve lowered their estimates for Asian Paints’ financial performance in the fiscal years 2025 and 2026 by around 8% and 10% respectively.

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Here’s a simplified breakdown of the stock updates:

  • Asian Paints’ stock was trading 3.62% lower at Rs 2,876.75 at 09:29 AM.
  • Goldman Sachs has also reduced its target price for Asian Paints from Rs 3,300 to Rs 2,825. They’ve lowered their earnings per share (EPS) estimates for fiscal years 2025 and 2026 by 5.2% and 10.9% respectively. Additionally, they’ve adjusted their target multiples downwards.
  • Goldman Sachs noted that Grasim Industries’ paint strategy with Birla Opus seems more detailed than previously thought.
  • Macquarie maintains an ‘Outperform’ rating on Asian Paints with a target price of Rs 4,000. They highlighted Grasim Industries’ focus on distribution and product quality, which they believe benefits Asian Paints more than smaller competitors like Berger Paints.
  • Grasim Industries’ stock was trading slightly lower at Rs 2,183.95 after experiencing significant gains earlier.

In simple terms, Asian Paints’ stock price decreased, with Goldman Sachs and Macquarie providing differing perspectives. Goldman Sachs lowered its target price due to concerns about Grasim Industries’ competitive strategy, while Macquarie remains optimistic about Asian Paints’ performance compared to smaller competitors.

All about Grasim Industries’ paint entity, Birla Opus

The Aditya Birla Group recently launched its new venture in the decorative paints business called Birla Opus. They have ambitious goals, aiming to generate revenues of Rs 10,000 crore and achieve profitability within three years of full operations. The group has started operations at three plants located in Panipat (Haryana), Ludhiana (Punjab), and Cheyyar (Tamil Nadu) for this new venture.

Grasim Industries, which is part of the Aditya Birla Group, announced its entry into the decorative paints business last year. They’ve committed investments of Rs 10,000 crore and plan to establish six manufacturing plants in India by 2025.

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