Asian Paints share price target: Why Nuvama has 'Buy' rating on this paints stock
Nuvama Institutional Equities maintains its 'Buy' rating on Asian Paints, highlighting stable margins, demand recovery, and strategic initiatives to boost growth, with a target price of Rs 2,935.
- Sep 2, 2025,
- Updated Sep 2, 2025 8:21 AM IST
Nuvama Institutional Equities has reiterated its 'Buy' rating on Asian Paints, setting a target price of Rs 2,935. The brokerage firm's optimism stems from the company's strategies to protect its market share while maintaining an Ebitda margin of 18–20% over the mid-to-long term. Despite potential quarterly fluctuations, the focus remains on leveraging repainting demand, which constitutes 85–86% of revenue.
According to Nuvama, the stabilisation of demand indicates a gradual revival, especially in rural areas, with urban sectors showing steady recovery. The company anticipates that the second quarter will maintain momentum due to urban demand recovery, benign raw material costs, and an early Diwali. "Nuvama reckoned Q2 shall sustain momentum on urban demand recovery, benign RM costs and an early Diwali with H2FY26 likely to outpace H1FY26."
The industrial business segment of Asian Paints continues to demonstrate robust growth, recording an 8.8% year-on-year increase in the first quarter of FY26, compared to 6% in FY25. This robust performance is complemented by the company's efforts to push the transition from unorganised to organised markets, particularly in the Economy segment, which is expected to help gain market share. "Nuvama forecast the volume-value gap shall be 3–4% in a steady state (5.1% in Q1FY26) as APNT’s efforts to push unorganised to organised in Economy shall enable it to gain market share."
Asian Paints is also benefiting from a rationalisation in competition, with early signs showing a stabilisation of rebates within the industry. This development, alongside a dedicated team set up by the company to win back small and medium dealers, is expected to strengthen its position in the market. Furthermore, the impact of anti-dumping duties on titanium dioxide (TiO2) is anticipated to be low due to adjustments in supplier pricing.
Nuvama highlights that raw material costs are likely to remain stable through FY26, which should support the company's pricing strategies without sacrificing margins. This stability is expected to contribute to sustained growth as the company navigates competitive pressures and market dynamics.
In terms of operational efficiency, Asian Paints' ongoing efforts to ramp up manufacturing capacity and implement backward integration are significant. The Mysuru factory, now the largest paint facility globally, along with initiatives to produce key raw materials, is set to enhance cost efficiency by 150–200 basis points and strengthen supply chain control.
The domestic decorative paints business has been challenged by urban slowdowns and competitive aggression, resulting in revenue declines. However, the international business has shown resilience, with the Middle East sector experiencing a 14% revenue expansion, highlighting the diversified nature of Asian Paints' portfolio.
Overall, Nuvama remains positive about Asian Paints' prospects, underpinned by strategic initiatives and market recovery signals. "Retain ‘BUY’ with a target price of Rs 2,935." As the company continues to focus on operational efficiency and market share, its growth trajectory appears promising.
Nuvama Institutional Equities has reiterated its 'Buy' rating on Asian Paints, setting a target price of Rs 2,935. The brokerage firm's optimism stems from the company's strategies to protect its market share while maintaining an Ebitda margin of 18–20% over the mid-to-long term. Despite potential quarterly fluctuations, the focus remains on leveraging repainting demand, which constitutes 85–86% of revenue.
According to Nuvama, the stabilisation of demand indicates a gradual revival, especially in rural areas, with urban sectors showing steady recovery. The company anticipates that the second quarter will maintain momentum due to urban demand recovery, benign raw material costs, and an early Diwali. "Nuvama reckoned Q2 shall sustain momentum on urban demand recovery, benign RM costs and an early Diwali with H2FY26 likely to outpace H1FY26."
The industrial business segment of Asian Paints continues to demonstrate robust growth, recording an 8.8% year-on-year increase in the first quarter of FY26, compared to 6% in FY25. This robust performance is complemented by the company's efforts to push the transition from unorganised to organised markets, particularly in the Economy segment, which is expected to help gain market share. "Nuvama forecast the volume-value gap shall be 3–4% in a steady state (5.1% in Q1FY26) as APNT’s efforts to push unorganised to organised in Economy shall enable it to gain market share."
Asian Paints is also benefiting from a rationalisation in competition, with early signs showing a stabilisation of rebates within the industry. This development, alongside a dedicated team set up by the company to win back small and medium dealers, is expected to strengthen its position in the market. Furthermore, the impact of anti-dumping duties on titanium dioxide (TiO2) is anticipated to be low due to adjustments in supplier pricing.
Nuvama highlights that raw material costs are likely to remain stable through FY26, which should support the company's pricing strategies without sacrificing margins. This stability is expected to contribute to sustained growth as the company navigates competitive pressures and market dynamics.
In terms of operational efficiency, Asian Paints' ongoing efforts to ramp up manufacturing capacity and implement backward integration are significant. The Mysuru factory, now the largest paint facility globally, along with initiatives to produce key raw materials, is set to enhance cost efficiency by 150–200 basis points and strengthen supply chain control.
The domestic decorative paints business has been challenged by urban slowdowns and competitive aggression, resulting in revenue declines. However, the international business has shown resilience, with the Middle East sector experiencing a 14% revenue expansion, highlighting the diversified nature of Asian Paints' portfolio.
Overall, Nuvama remains positive about Asian Paints' prospects, underpinned by strategic initiatives and market recovery signals. "Retain ‘BUY’ with a target price of Rs 2,935." As the company continues to focus on operational efficiency and market share, its growth trajectory appears promising.