Shares of Asian Paints slid 0.8% to ₹2,283.7 on Thursday, while HSBC slashed its ₹2,650 target to ₹2,420— a 9.4% cut that now sits below the market consensus.
Q3 gross margin fell to 30.2%, missing the 31.5% consensus estimate; raw‑material costs rose 15% but were largely absorbed by the company, eroding profitability.
HSBC cited an inferior product mix and destocking as the main drivers of the weak profitability, whereas Jefferies warned that fierce competition will keep price hikes modest and cost‑pass‑through limited.
The Indian paint sector is projected to grow 6.3% in FY26, yet premiumization gains are being offset by price sensitivity and a competitive landscape that has intensified since the last quarter.
Management reiterated an 8‑10% volume growth target for the fiscal year and said backward integration plans could lift margins by 1‑2% over the next 12 months, offering a glimmer of upside if the cost‑control narrative holds.