Asian Paints shares volatile ahead of Q3 results. Here's what analysts expect

Asian Paints shares swung between gains and losses amid volatile trade on Thursday, as investors awaited the paint maker's financial results for the October-December period due later in the day. The stock of Asian Paints -- India's largest paint company by sales as well as market value -- held up half a per cent at Rs 2,961.4 apiece on BSE, having moved within a Rs 47 range around the flatline, between Rs 2,925.5 and Rs 2,972.1, earlier in the day. 

The paint major is expected to register a 10 per cent growth to Rs 1,130 crore in a net profit for the quarter ended December 2022 compared with the corresponding period a year ago, according to Zee Business research.

Also Read: Asian Paints Q3 Results 2023 Preview: Despite muted volume, net profit likely to jump 10% YoY on price hikes

Asian Paints' revenue is estimated at Rs 9,297 crore, which translates to a nine per cent increase on a year-on-year basis.

The company's overall volume growth may remain muted on account of a high base in the domestic decorative segment, and value growth visibility is expected on the back of price hikes, according to Zee Business research.

Its gross margin is expected to improve owing to subsiding raw material costs, which may lead to a flat EBITDA margin, according to Zee Business research. 

Also Read: Stocks to buy: Buy Axis Bank, Asian Paints, DLF, Power Grid and Ajanta Pharma shares for 38% return

What analysts say

According to HDFC Securities, the worst of the gross profit margin pressure seems behind for Asian Paints with a moderate raw material basket. The brokerage has a 'reduce' rating on the Asian Paints stock with a target price of Rs 2,700 per share.

Asian Paints stock performance

In the last one year, the Asian Paints counter has lost around 10 per cent of its value, underperforming the Nifty50 benchmark, which has risen 1.2 per cent.

Also Watch: Asian Paints lines up Rs 2000 crores in new plant; Brokerages mixed view on the stock