New coat of opportunity for Berger and Indigo

Analysts see potential in select paint stocks amid entry of big players

- Tanmay Tiwary

The paint sector is seeing heightened competition with the entry of deep-pocketed groups like Aditya Birla and JSW. However, some brokerages see an opportunity in select stocks. Nuvama Institutional Equities, for instance, is betting on Berger Paints and Indigo Paints. The domestic brokerage is turning its attention to smaller players in the paint industry, signalling a shift in preference from industry giant Asian Paints to Berger and Indigo.

The brokerage sees brighter prospects for these emerging contenders in the second half of 2024-25 (FY25), citing several headwinds for Asian Paints that could limit its growth. Analysts Abneesh Roy and Jainam Gosar of Nuvama point to Asian Paints' higher exposure to big cities as a key factor. They said urban centres have been grappling with challenges like soaring food inflation, escalating housing rentals, sluggish wage growth, and rising interest payments—factors that have weighed heavily on demand.