Nomura downgrades Asian Paints, sees no immediate recovery
Nomura has downgraded Asian Paints to 'neutral' from 'buy' citing concerns about slowing volume growth, the possibility of price cuts and an increase in A&P spending over the next few quarters.
Brokerage Nomura has downgraded Asian Paints to "neutral" from "buy" and cut its target price to Rs3,455 from Rs3,500, citing concerns about slowing volume growth, the possibility of price cuts and an increase in A&P spending over the next few quarters.
Nomura does not expect Asian Paints to post a "swift" recovery after a "soft" first-quarter, but is more optimistic in the long-term.
"For the long term, we continue to believe that Asian Paints is one of the best proxies in which to invest in the consumption theme in India, as the industry dynamics remain attractive, in our view," Nomura said in a noted dated Thursday.
Asian Paints April-June net profit rose 9.1 percent to Rs 288 crore ($51.91 million) from a year earlier.
Shares of the paints maker were last up 0.3 percent versus 0.4 percent fall in the NSE index.
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Asian Paints on Monday reported a 14.76 percent fall in its consolidated net profit at Rs 506 crore for the September 2018 quarter.