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Investing.com - JPMorgan has upgraded Asian Paints (NSE:ASPN) (APNT:IN) from Underweight to Neutral while raising its price target to INR2,500.00 from INR2,250.00, citing early signs of volume recovery.
The upgrade follows multiple quarters of downgrades and comes as the investment bank observes that margins have likely bottomed out in FY25, with a 1-2% marginal EPS upgrade now projected.
JPMorgan noted that significant derating has driven Asian Paints’ valuations below its 5-year and 10-year averages, though it cautioned that the competitive landscape remains challenging with rivals like Birla Opus Paints and JSW-Akzo Nobel likely to keep the pace of margin recovery relatively modest.
On its Q1 earnings call, Asian Paints management reported marginal urban demand revival alongside stable rural demand, with domestic décor volume growth at 3.9% expected to trend upward in coming quarters, further supported by an undemanding base.
The company maintained its EBITDA margin guidance at 18-20%, expecting benefits from softer crude prices, procurement efficiencies, and backward integration benefits to more than offset higher titanium dioxide costs and sustained higher channel and brand spending.
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