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Informist, Tuesday, Dec. 9, 2025

By Simran Rede

MUMBAI – After Asian Paints came under heavy selling pressure in the spot market Tuesday, traders added fresh short positions in the call options of its derivatives chain. Analysts expect the sales of Birla Opus, the paints brand launched by Grasim Industries, to be better than Asian Paints in the December quarter, which likely dented investor sentiment for the latter.

Shares of Asian Paints ended the session 4.5% lower at INR 2,796 on the National Stock Exchange. The stock closed in the red for the second session, falling to a near-one-month low. The stock is expected to decline further in the coming sessions and may test INR 2,650, said Sundar Kewat, technical and derivatives analyst at Ashika group. He pegs near-term support for the stock at INR 2,700 and immediate resistance at INR 2,889. The next resistance is seen at INR 2,950-INR 2,980, he said.

The current market price is still 22% lower than the stock's record high of INR 3,590 hit in January 2022. A fundamental analyst tracking the company said he does not expect the stock's price to cross the all-time high at least for the next couple of months given the low demand for paints, high competition, weak earnings outlook, and high valuations.

Analysts are wary of the stock's high valuation and weak earnings outlook for the December quarter. The stock is trading at around 57 times the price-to-earnings multiple, an analyst at a domestic brokerage said. However, the stock may rise to INR 3,000 and then witness a major sell-off, the analyst said.

The growth in sales volume of Asian Paints is likely to be in high-single digits, largely similar to the company's 10.9% on-year volume growth reported in the September quarter. The volume growth will not improve substantially as the demand in the paints industry continues to be weak, the analyst said. The gap between the volume growth and value growth is expected to remain steady at 5%, he said. The company is not expected to see any material growth in value at least in 2025-26 (Apr-Mar) and it is expected to be in mid-single digit, according to the analyst.

In the options chain of the company, premiums on INR 2,860-INR 3,000 call contracts, which are 2-7% higher than the spot level, fell 61-74% and those on put contracts INR 2,820-INR 2,880 increased multi-fold. The highest addition of open interest was at INR 2,860 call and INR 2,780 put options expiring on Dec. 30. The maximum concentration of open interest was at INR 3,000 call and INR 2,800 put strikes. 

Some short bets were also added to the futures series of Asian Paints. The December contract closed 4.5% lower at INR 2,800.70 and open interest rose 6% to 11.72 million.

The benchmark indices closed lower Tuesday due to weak sentiment across global markets ahead of the outcome of the US Federal Reserve's policy meeting at 0030 IST Thursday. The Nifty 50 fell for the second session in a row, closing 0.5% lower at 25839.65 points because of weakness in index heavyweights ICICI Bank, Reliance Industries, and HDFC Bank.

The technical and derivatives analyst said the 25700 level will act as a key support for the index in the near term while staying above 26000 level would trigger further upside, in which case it will test the next key hurdle of 26200-26500 points.

The put-call ratio edged up to 0.69, pointing to elevated caution and rise in defensive positioning, according to derivatives analysts. "Derivatives setup reflects a cautious undertone. Call writers have aggressively added fresh positions at at-the-money and near-term strikes, underscoring strong overhead supply," Dhupesh Dhameja, derivatives research analyst at SAMCO Securities, said in a note. "In contrast, put writers have partially unwound their positions and shifted to lower strikes, indicating expectations of continued consolidation."

--Nifty 50 December closed at 25958.80, down 105.90 points; 119.15-point premium to the spot index
--Nifty 50 January closed at 26125.00, down 111.80 points; 285.35-point premium to the spot index
--Nifty 50 February closed at 26263.30, down 118.70 points; 423.65-point premium to the spot index

InterGlobe Aviation, BSE, Reliance Industries, ICICI Bank, HDFC Bank, Asian Paints, Hero MotoCorp, Eternal, State Bank of India, Mahindra & Mahindra, Vodafone Idea, Infosys, Multi Commodity Exchange of India, Adani Enterprises, Bharat Electronics, Coforge, Hindustan Aeronautics, Vedanta, Bharti Airtel, and Tata Consultancy Services were the most actively traded underlying stocks Tuesday.  End

Edited by Ashish Shirke

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