Asian Paints stock has fallen 22.08 per cent in 2023

Asian Paints Ltd's shares have declined 8.17 per cent in 2023, which is in line with a 5.30 per cent drop in the domestic equity benchmark, the BSE Sensex. The stock was 1.49 per cent lower at Rs 2,797. The counter has fallen 22.08 per cent from its 52 week high of Rs 3,590, hit on September 28 last year. It rose 9.26 per cent from its one-year low of Rs 2,560. On June 17, 2022, a June 25, was touched.

Two technical analysts suggested Asian Paints traded rangebound between Rs 2,700 and Rs 2,900 levels, while brokers remained mixed on the counter. Another analyst said that support on the counter could be seen at Rs 2,765.

Nuvama Research said that Asian Paints has maintained its dominance in the industry, and we do not anticipate any threat to it in the face of impending entry by Grasim. Other segments such as industrials continue to perform well, the company has done quite well among Indian OEMs Original Equipment Manufacturers. The company has sharpened the focus on other allied segments such as waterproofing and adhesives with bigger plans for home d cor, which is an additional growth trigger for the company. The growth of the premium-luxury segment has played a pivotal role. With raw materials deflating, we anticipate margin improvement in Q 4 FY 23 E and FY 24 E.

The brokerage noted that rupee depreciation, monsoon and Grasim's entry into the paints business launch still a year away are key risks for the company. Nuvama reiterated its Buy' call with a target price of Rs 3,615.

In contrast, Kotak Institutional Equities has assigned a 'Reduce' rating and pegging the counter at a fair value of Rs 2,800, slightly higher than today's closing level.

Osho Krishan, Senior Analyst Technical Derivative Research at Angel One, said Asian Paints is in a corrective phase from the past five trading months and has corrected 22 per cent from its lifetime highs. The stock is currently consolidating in a broad range of the Rs 2,700 -- 2,900 odd zone and a decisive breakthrough beyond the stated levels could only dictate the next leg of the trend. Therefore, one needs to keep track of the mentioned levels and act accordingly in the comparable period. For the last two months, the counter has been trading in a tight range of Rs 2,700 -- 2,900, said Jigar S Patel, Senior Manager Technical Research Analyst at Anand Rathi Shares and Stock Brokers. The daily RSI Relative Strength Index has been rejected twice from 60 levels, which is a matter of concern as of now. There is no fresh longs at the current market price. AR Ramachandran, from Tips 2 trades said, The stock looks bearish on the daily charts with strong resistance at Rs 2,855. A close below support of Rs 2,765 could lead to lower targets of Rs 2,700 -- 2,588 in the near term. Asian Paints has an average target price of Rs 3,299. The Trendlyne data shows a potential upside of 15.44 per cent. The stock has a one-year beta of 0.63, indicating low volatility.

The counter's 14 day RSI came at 46.07. A level below 30 is considered oversold, while a value above 70 is considered overbought. The company's stock has a price-to- equity P E ratio of 71.24. Asian Paints' earnings per share EPS came at 39.27.

The stock traded lower than the 50 day, 20 day, 50 day, 100 and 200 day moving averages.

Asian Paints reported a 6.38 per cent increase in net profit to Rs 1,097 on the earnings front. In the third quarter of December 2022, Q 3 FY 23 ended against Rs 1,031, 06 crore were spent in the third quarter. In the same period last fiscal, 29 crore were posted.

Indian equity benchmarks fell today, snapping their two-day climb as banks, financial and technology stocks dragged.

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