Paint majors Asian Paints Ltd and Berger Paints Ltd gained on July 9, after international brokerage HSBC hiked its target price on the players, anticipating a pick-up in demand in the second half of the financial year 2026.
The brokerage noted, that following the entrance of Grasim Industries' Birla Opus, deal incentives have achieved a broad parity across players. According to HSBC, this is incrementally positive in terms of competitive intensity.
Birla Opus' paints revenue target indicates a higher throughput per tinting machine, which HSBC notes is a 'big ask.' However, it remained optimistic about the underlying industry growth improving in H2FY26.
HSBC maintained its buy call on Asian Paints and Berger Paints, hiking the target price to Rs 2,900 from Rs 2,700 and to Rs 640, from Rs 620, respectively.
At 9.23 a.m., shares of Asian Paints were quoting Rs 2,512, higher by 1.1 percent. Berger Paints stock rallied 1.2 percent to Rs 589.8 apiece.
Recently, after four long years, domestic brokerage ICICI Securities reversed its negative stance on paints majors Asian Paints Ltd and Berger Paints Ltd, citing a likely turnaround in the industry. The broking house upgraded its rating on the paint players to 'add' from 'reduce' earlier, believing that the paint industry revenue growth is likely to recover in FY26 after declining in FY25.
In a note, the brokerage clarified why it gave the paints players an 'add' rating, instead of a 'buy' call. In the newer industry landscape - Birla Opus is likely to reach ~10 percent market share in three years, JSW Paints + Akzo Nobel India combined- may result in a fight for third position along with Kansai Nerolac.
ICICI Securities said, "Importantly, we do have some concerns about exit multiples for incumbents as Birla Opus, Indigo Paints, JSW Paints have proven in the last decade that consensus probably overestimated the strength of entry barriers in Paints industry."
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