Rise in competitive intensity for market share, talent, and shelf-space, and mind share will keep Asian Paints' margins under pressure. To add to that, weakness in urban demand and a rise in competition in terms of mergers and acquisitions may also hurt earnings, ultimately leading to rating downgrade, Citi said.

Asian Paints' consolidated net profit attributable to the owners of the company declined 23.3 per cent year-on-year (Y-o-Y) to Rs 1,110.5 crore in Q3FY25, down from Rs 1,447.7 crore in Q3FY24

Asian Paints shares on Wednesday (Feb 5) dropped as much 5 per cent as Q3 numbers failed to impress the Street. The Mumbai-headquartered paints company reported a decline in its revenue for the fourth consecutive quarter during the quarter under review while net profit fell by more than 20 per cent.

Asian Paints shares dropped over 5% on Wednesday after the company reported a 23.5% decline in consolidated net profit for the third quarter ended December 2024. The decline was attributed to muted demand and a weak festive season.

"sell" rating on the stock, while the number of analysts with a "hold" and "buy" recommendation on Asian Paints stood at 11 and 10 respectively.

The paint industry continued to be impacted by subdued demand conditions, especially in the urban centres, says Amit Syngle, MD & CEO of Asian Paints.

After Asian Paints Ltd. posted disappointing results for third quarter, Citi Research cut its earning per share estimates by 3% and highlighted concerns regarding the near-term growth outlook. The brokerage maintained a 'sell' rating, with a target price of Rs 2,300 apiece, implying a 2.1% upside from Tuesday's closing price.