Asian Paints shares tanked 9% during Monday’s early trade following the company’s second-quarter results where its net profit was seen declining by 42%.

What Happened: The paints major reported a net profit of ₹694.64 crore in the quarter that ended September compared to ₹ 1,205.42 crore reported in the same quarter a year ago. The company’s revenue from sales came in at ₹8,003.02 crore.

Morgan Stanley had an “underweight” call for Asian Paints with a target price of ₹2,522. The company's Q2 revenue and margins missed the brokerage’s estimates, primarily due to subdued demand and extended rains and floods. Volume growth of -0.5% was weaker than its peers, it noted. Product mix, rising rebates, employee costs, and high selling expenses are some of the key factors to watch, Morgan Stanley said.

Nomura had a “neutral” rating on Asian Paints with a target price of ₹2,500. The company's Q2 results also missed Nomura’s expectations. With a 0.5% YoY volume decline, the company underperformed its peers’ growth of around 3%-4% and estimates of 8% rise.

See Also: NHPC Shares Continue Slump After Q2 Print, Analysts Remain Cautious

JPMorgan has downgraded Asian Paints to “underweight” and cut its target price to ₹2,400. Q2 results were significantly weaker than expected, with revenue and EBITDA coming in 6% and 20% below consensus, respectively, the brokerage said. Asian Paints continues to lag behind its peers, it noted, with the performance gap widening further in Q2, both in terms of revenue and earnings. JPMorgan has lowered its FY25-FY27 EPS estimates by 10%-12%.

Jefferies had an “underperform” call for Asian Paints with a target price of ₹2,100. The company reported a significant miss in Q2, with underperformance across the board, the brokerage said. While management attributed the weak performance to sluggish consumer sentiment and seasonality, it remains optimistic for a positive outlook in the second half of the year, Jefferies noted.

Price Action: Asian Paints was down 8.19% to ₹2,542.55 on Monday morning.

Read Next: HAL Bags Dornier Aircraft Upgrade Contract, Shares Slip Ahead Of Q2 Results