Asian Paints, India's leading paint company, saw a sharp dip in share prices recently, disrupting its long-standing bullish trend. The company's shares declined by over 9% in intraday trading, hitting a low of ₹2,506 on the National Stock Exchange.
This marks a significant fall of 26% from its high of ₹3,395 in September 2024. The drop has brought Asian Paints shares to their lowest level in three years, signalling possible implications for those engaged in share market investment.
In its Q2 FY25 earnings report, Asian Paints reported a year-on-year drop in consolidated net sales of 5.3%, reaching ₹8,003 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) fell by 27.8% YoY to ₹1,239.5 crore.
Additionally, profit after tax plunged by 42.4% YoY to ₹694.6 crore. This underwhelming performance has put additional pressure on the stock, impacting its attractiveness for share market investment as investors weigh the company's financials.
The recent decline in Asian Paints' stock—now over 20% down from its peak—signals a shift in trend from bullish to bearish territory, a move that often implies a bear market outlook. With this downward shift, share market investment in Asian Paints might warrant caution as the stock breaks below its six-year upward trendline. A downside breakout, if sustained, could imply limited upward potential in the near future for investors looking at share market investment options.
Following this fall, Asian Paints shares currently trade around ₹2,545. Analysts note downside risks of up to 16.5% in the near term, with key support levels observed at ₹2,315. Resistance is expected around ₹2,750, ₹2,930, and ₹3,030.
Share market investors should monitor these levels as the stock's technical setup reveals increased volatility, which may affect short- and long-term share market investment plans.
For the first time since 2018, Asian Paints has experienced a downside breakout on its long-term charts, falling below its monthly supertrend line. Previously, the stock consistently traded above this line, reflecting a robust bullish trend that has now shifted.
This recent breakout suggests that Asian Paints shares could face a period of subdued performance with reduced upside potential. The stock's position below its 20- and 50-month moving averages—set at approximately ₹2,925 and ₹3,025, respectively—adds resistance points that could challenge the stock's recovery and might influence share market investment strategies.
Currently trading below ₹2,700, Asian Paints' stock appears to remain under pressure in the near term, indicating a bearish outlook. The stock could potentially test its 100-month moving average support level near ₹2,125. Interim support levels are expected around ₹2,460 and ₹2,230, points that have not been seen in over three years. These technical levels will likely influence share market investment decisions regarding Asian Paints as investors assess the viability of the stock amid current trends.
The end of a six-year rally and recent declines have cast uncertainty on Asian Paints' near-term outlook. With the company's earnings slowdown, technical indicators pointing towards resistance, and support levels nearing three-year lows, share market investment in Asian Paints may carry risks in the near term.
As the stock seeks stability, investors focused on share market investment should consider monitoring these technical and fundamental factors, evaluating whether recovery is likely or if additional declines may follow.
For android only