Berger Paints has also indicated that a second round of price increases could follow in April.
The brokerage said that margin pressures are likely to remain a near-term concern for paint manufacturers due to elevated input costs.Macquarie maintains an ‘Outperform’ rating on Asian Paints with a price target of ₹3,100. It has an ‘Underperform’ rating on Berger Paints with a target price of ₹410, while Kansai Nerolac is rated ‘Neutral’ with a price target of ₹220.
Of the 38 analysts covering Asian Paints, 14 have a ‘Buy’ rating, eight recommend ‘Hold’, and 16 have a ‘Sell’ call.
Of the 25 analysts tracking Berger Paints, 12 have a ‘Buy’ rating, five recommend ‘Hold’, and eight have a ‘Sell’ rating.
Of the 19 analysts covering Kansai Nerolac, eight have a ‘Buy’ rating, six recommend ‘Hold’, and five have a ‘Sell’ call.Cost inflation returns for paint cos
Earlier, HSBC said cost inflation appears to be returning for paint companies after nearly four years. The brokerage said that price increases could narrow the value-volume gap in the sector, although market dynamics and competitive structures remain different across companies.
HSBC has cut price targets for Asian Paints and Berger Paints while maintaining a ‘Neutral’ stance on both stocks.
Meanwhile, a report by Systematix Research suggested that paint prices in India could rise by 2-5% in April if crude oil prices remain elevated.
The report said dealers expect companies to implement price hikes next month should crude prices sustain at current levels. However, the initial increase is likely to be modest and introduced gradually.
According to the brokerage, the first round of price hikes could be in the low single digits and may be staggered over the first quarter of FY27.
Additional price revisions may follow if crude oil prices continue to rise and remain elevated for a prolonged period.
The extent of margin impact will depend on the level at which crude prices stabilise, how long they stay elevated, and the pricing actions taken by companies.
