Nomura downgrades Asian Paints, sees no swift rebound

 

Reuters Market Eye - Nomura downgrades Asian Paints to "neutral" from "buy" and cut its target price to 3,455 rupees from 3,500 rupees, citing concerns about slowing volume growth, the possibility of price cuts and an increase in A&P spending over the next few quarters.

Nomura says 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 says in a noted dated Thursday.

 

Asian Paints on July 20 reported April-June net profit rose 9.1 percent to 2.88 billion rupees from a year earlier.

Shares of the paints maker last up 0.3 percent versus 0.4 percent fall in NSE index.