Asian Paints shares rise 5.5% to emerge as top Nifty gainer: Birla Opus CEO resigns, two other reasons

Birla Opus announced on November 5 that Hargave has quit with immediate effect and will be joining Britannia as CEO from December 15. Hargave has quit after 18 months of its launch.

Abneesh Roy of Nuvama said channel checks indicate no growth at Birla Opus over the past 6–7 months and paints remain a high-entry-barrier business, reported CNBC-TV18.

Nuvama maintained "Buy" rating on Asian Paints and said it has turned aggressive over last two quarters.

"Though Q2–Oct saw rain impact, paint demand is only deferred, not lost (unlike beer/soft drinks)," said Nuvama.

Expect recovery from November as rains ease & discretionary demand picks up post GST cuts in non-paint categories, said the brokerage.

Nomura raised its price target higher to Rs 3,100 from Rs 2,285 earlier, reported CNBC-TV18. The revised price target implies a potential upside of 25% from November 4 closing levels.

Falling crude prices:

Oil prices extended decline, which in turn pushed up the crude-sensitive stocks like Asian Paints. Earlier yesterday, oil prices fell more than 1 percent to settle at two-week lows on pressure from concerns of a possible global oil glut.

The fall in oil prices boosts stocks that need crude oil as a raw material

MSCI rejig:

News reports said the MSCI Standard index is going to increase the company's weightage in its index.

Among the eight stocks gaining higher weightage in MSCI's index are Asian Paints, Apollo Hospitals, Lupin and SRF.

According to Nuvama Alternative & Quantitative Research, Asian Paints will likely see inflows to the tune of $95 million, due to the increase in its weightage, reported CNBC-TV18.

The weightage of Samvardhana Motherson, Dr. Reddy's, REC and Zydus Life has been reduced in the latest review.

Asian Paints share price history:

The shares of Asian Paints have risen more than 3 percent in the past five days, and around 11 percent in the past one month. The stock has gained nearly 8 percent in the past six months.

Its P/E ratio currently stands at over 68.

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(With inputs from Reuters)

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