Easing raw material prices likely to aid margins of Asian Paints

Sales performance in the festival season was muted; volumes expected to recover

After a 15 per cent fall from its highs towards the end of September, the stock of Asian Paints has been trading flat-to-marginally higher since then. Margin concerns due to a spike in raw material prices, down-trading by customers and higher competitive pressures led to pressure on the stock.

Brokerages, however, believe that the risk-reward has improved as raw material prices cool off and volumes could witness a gradual recovery.

ICICI Direct Research said, “Consumer discretionary stocks have undergone healthy price retracements over the past couple of months after the June–August rally. Within the space, we like Asian Paints, given