Nuvama Institutional Equities has maintained a ‘BUY’ recommendation on major paint industry players Asian Paints, Berger Paints, and Pidilite Industries.
The brokerage anticipates a positive shift in demand for these companies in the second half of FY26, despite challenges faced in the first half due to heavy rains impacting demand.
The brokerage said Asian Paints remains focused on safeguarding its market share, with its EBITDA margin likely to stabilise within the 18-20 per cent band. The company has initiated efforts to reconnect with smaller dealers and enhance painter relationships, aiming to boost demand in the economy and early-premium segments. The volume-value gap is projected to be approximately 5 per cent by FY26. Nuvama has retained its ‘BUY’ call on the stock with a target price of Rs 2,935.
Berger Paints forecasts a better performance in the latter half of FY26 compared to the first half, with expected volume growth between 7-9 per cent following the monsoon season. The company aims to maintain an EBITDA margin in the range of 15-17 per cent. It continues to address distribution gaps in urban centres and its weaker presence in certain states, while the impact of new competitors is expected to stabilise, Nuvama said. The brokerage has maintained a ‘BUY’ rating with a target price of Rs 670.
Pidilite’s Haisha Paints, still operating as a pilot project across five states, has shown improvement despite initial challenges. Supported by an expanding dealer network and increased tinting machine presence, the brand is positioned competitively against peers, offering quality at a 5-10 per cent discount. Pidilite also demonstrated strong performance in adhesives, maintaining a double-digit volume growth trajectory. Nuvama has reiterated its ‘BUY’ stance with a target price of Rs 3,785.
Nuvama said the gradual improvement in demand is supported by stabilising input costs and favourable economic conditions, such as easing inflation and potential GST reductions leading to higher disposable incomes. These factors contribute to the optimism for an accelerated growth trajectory in the coming months.
Nuvama underscores the importance of protecting market share amidst new market entrants. The brokerage highlights that input costs remain stable, providing a favourable backdrop for these paint and adhesive companies to sustain their growth objectives.
Overall, Nuvama’s analysis points to a brighter outlook for Asian Paints, Berger Paints, and Pidilite, supported by strategic initiatives and market conditions. The market dynamics are expected to shape the competitive landscape positively as these companies navigate potential challenges and opportunities.