Prabhudas Lilladher Recommends 'Reduce' on Asian Paints, Sets Target at Rs 2464

• Prabhudas Lilladher cut FY27/FY28 EPS estimates for Asian Paints by 1.3% due to subdued demand and rising costs.
• Subdued demand persists despite favorable macro conditions, indicating structural softness in the paint market.
• New employee code is expected to increase employee costs by 10-15 bps over FY27-28.
• Intensified marketing and innovation spending will limit margin expansion amid increasing competition.
• Concerns include sustained competitive intensity, a 4-5% volume-value gap, and softness in Bath, Kitchen, and Home Décor segments.

Why It Matters: Prabhudas Lilladher advises 'Reduce' on Asian Paints, citing subdued demand, rising costs, and intense competition.