Asian Paints shares jump 6% in 5 sessions; what you need to know

On Thursday, shares of the firm closed at ₹2,430.50 apiece on the National Stock Exchange, rising 0.46%. The stock has gained 6% in the last five trading sessions.

Over a month, Asian Paints shares have surged nearly 8%, while for a six-month period, it has climbed a little over 4%. Since the beginning of the year, the stock has advanced 5.4%.

Its market capitalisation stands at ₹2.33 lakh crore as of Thursday’s closing.

Investors had been showing interest in the stock despite few headwinds.

Last week, Asian Paints had acquired the remaining 40% equity stake in Obgenix Software Private Limited, which operates under the brand ‘White Teak’, for a cash consideration of ₹188 crore.

The stake was purchased from Obgenix promoters—Pawan Mehta and Gagan Mehta. With the recent acquisition of 160,400 equity shares, Asian Paints now holds 100% of White Teak’s equity share capital, making it a wholly owned subsidiary.

In April 2022, Asian Paints had initially acquired a 49% stake in the firm, followed by an additional 11% in June 2023. 

Further, this week the Competition Commission of India (CCI) has ordered an investigation against Asian Paints for allegedly abusing its position to dominate the market for manufacturing and sale of decorative paints.

The complaint was filed by Grasim Industries, which has recently entered the segment. Aditya Birla Group firm Grasim had entered the decorative paints segment under the 'Birla Opus Paints' brand in February last year.

According to a July 1 order from CCI, Grasim has allegedly accused Asian Paints of engaging in exclusionary practices aimed at stifling its entry and growth in the Indian decorative paints segment.

This, however, did not dampen investors’ interest. Shares of the paint company have been trading with gains, as analysts expect a recovery in the sector after two disappointing fiscal years, FY24 and FY25.

The paint industry, analysts note, saw a rare decline in growth in FY25—the first in several years—driven by a combination of factors. Slowing demand, intensifying competition that limited pricing power, and elevated sales discounts impacted the decorative paints segment.

Asian Paints had reported a net profit of ₹692 crore for the January-March quarter, marking a decline of 45% from the ₹1,257 crore profit logged in the same period last year.

The company's revenue declined 4% to ₹8,329.59 crore in Q4 as against ₹8,701 crore in the year-ago period.