Asian Paints confirmed a price hike on Tuesday. CNBC-TV18 had told the viewers that it could be anywhere between 4 percent and 6 percent with effect from December 5. The latest price hike is over and above one of 8-10 percent the company had taken with effect from November 12.
The latest price hike takes the company's cumulative increase in rates from the start of this year to around 21 percent. And that is something the Street is liking, notwithstanding the impact that it may have on demand.
Nomura has a buy rating on Asian Paints shares with a target price of Rs 3,550. The brokerage has said that the company's margin pressure will start to abate at a much faster pace than expected.
Edelweiss believes the company's brand strength operational prowess and market leadership will help it sustain its volume growth path.
Macquarie has said that the price hikes will alleviate concerns about whether the margin of 18-20 percent will be difficult to achieve by the fiscal fourth quarter. The brokerage has a target price of Rs 3,900 for the stock.