Paint stocks witnessed strong buying interest on Tuesday, led by a sharp rally in Asian Paints and Berger Paints, as softer crude oil prices boosted sentiment across the sector. Other major players, including Indigo Paints Ltd, Kansai Nerolac Paints Ltd, Sirca Paints India Ltd and Shalimar Paints Ltd surged up to 5 per cent during the session.
The rally in paint counters came after crude oil prices declined when Donald Trump said he had directed the US military to postpone strikes against Iranian power plants, easing concerns over supply disruptions and input cost pressures for paint manufacturers.
Asian Paints rose sharply in early trade, climbing a little over 4 per cent on the BSE. At 10.24 am, the stock was trading 2.53 per cent higher at ₹2,174.20 after hitting an intraday high of ₹2,213.40 compared with the previous close of ₹2,120.50.
Adding to investor interest, media reports indicated that Asian Paints has announced a 6–8 per cent price hike across its portfolio with effect from April 10.
According to Morgan Stanley, demand trends in the paint sector remain weak across markets, particularly in the retail segment, while price hikes are on the horizon amid rising competitive intensity. The brokerage noted that Asian Paints had refrained from raising prices until March 20, but channel checks suggest hikes are likely in early April. It added that Berger Paints India Ltd has already raised prices by 4–5 per cent in select solvent-based products from March 21.
Morgan Stanley also highlighted that elevated discounts and competitive pressures persist, with Asian Paints stepping up dealer and painter incentives to regain retail market share, especially in western regions.
Macquarie maintained an outperform rating on Asian Paints with a target price of ₹3,100. The brokerage said the company plans to implement price hikes in two phases. The first round, effective April 10, involves a 6–8 per cent increase across emulsions, enamels, primers, distempers and the Neo Bharat range.
Price increases in thinners will also take effect from the same date and are expected to be significantly higher, although the exact quantum has not been disclosed. A second round of hikes, ranging between 6–8 per cent, will be implemented from April 21 across the remaining portfolio, including waterproofing products, tile adhesives and wood finishes.
Morgan Stanley maintained an underweight rating on Asian Paints with an unchanged target price of ₹2,126. The brokerage added that the hikes will span emulsions, enamels, primers and wood finishes, while thinners are likely to see a sharper increase.