Paint stocks to buy: The competitive scenario in the paint sector will only increase in the near to medium term, caution analysts
Top Paint stocks to buy, paint stocks outlook: The performance of The performance of paint stocks has not been colourful at the bourses thus far in calendar year 2024 (CY24). ACE Equity data shows that Kansai Nerolac share price has tumbled 19.76 per cent year to date (YTD) in CY24, followed by Berger Paints share price (14.97 per cent), and Asian Paints share price (13.57 per cent).
By comparison, the Nifty50 has surged 11.92 per cent YTD, while the broader Nifty500 has soared 18.26 per cent. Click here to connect with us on WhatsApp
This subdued CYTD performance of paint stocks at the bourses, analysts said, has been on account of subpar March 2024 (Q4-FY24) numbers. Expected entry of new players later in the year (Birla Opus) amid weak demand in Q4-FY24 also dulled sentiment.
Going forward, analysts do not expect an immediate trend reversal as overhangs of rising competitive intensity, coupled with weak discretionary spending, are likely to keep stock prices under pressure. The rerating of paint stocks, if any, will be gradual as investors remain watchful of how the dust would settle in the oligopolist market.
«Our channel check suggests the competitive scenario in the paint sector will only increase in the near to medium term, especially with the entry of Grasim Industries-owned Birla Opus Paints», says Amit Purohit, vice president for research at Elara Capital.
