Brokerage firms have downgraded the rating on Asian Paints stock after poor results in the September quarter. The company's results in the second quarter of the financial year have been weaker than expected. Analysts have downgraded the rating on the stock due to increasing competition for the company and lack of clear outlook for the future. Asian Paints' earnings estimates (EPS) and target price have also been cut.

In the second quarter, Asian Paints' total volume declined by about 0.5%. Whereas, it was estimated to grow by 6% - 8% year-on-year. The company's net profit has also almost halved and margins have seen a pressure of 480 basis points. During this period, the company's gross margin has also seen a decline of 260 basis points.

As soon as the market opened on Monday, Asian Paints' stock came under pressure. During early trading, this stock was the weakest stock in Nifty. After the results, Asian Paints management said that the demand situation is challenging and sentiment has also been affected. Asian Paints shares have slipped by about 19% from the peak of ₹ 3,422 per share. Global brokerage firm Jefferies has set a target of ₹ 2,100 per share, giving an opinion of Underperform on Asian Paints. This is about 25% lower than Friday's closing price. The brokerage firm wrote in the note that with increasing competition, the company's concerns are also increasing and the outlook is also not clear. JPMorgan has also kept an Underweight opinion on Asian Paints and reduced the target price from ₹ 2,800 per share to ₹ 2,400 per share. Earlier, the brokerage firm had a Neutral opinion on the stock. This brokerage firm says that barring the COVID-19 pandemic, domestic decorative paint volume has declined for the first time in the last decade. The entire industry has been affected by the weakness in demand in the recent quarters. But, Asian Paints has lagged behind other companies on the income and earnings front. Nomura has also kept a Neutral opinion on the stock and set a target price of ₹ 2,500 per share. The brokerage firm said that volume may improve in the second half. There will be benefit from delay in demand and better demand in rural India. But, sales and EBITDA figures may again remain flat. Morgan Stanley has set an Underweight rating on Asian Paints with a target price of ₹2,522 per share. The brokerage firm said it will keep an eye on product mix, rising discounts, employee costs and higher sales expenses. CLSA has set a target price of ₹2,290 per share on the stock and has an Underperform rating.