Shares of Asian Paints Ltd surged 4.61% to Rs 2,601.40 in Thursday’s session, emerging as one of the top gainers on the NSE after global brokerage Nomura upgraded the stock to a ‘Buy’ rating from ‘Neutral’ and raised its target price to Rs 3,100 from Rs 2,285 earlier. The revised target implies a potential upside of nearly 25% from Tuesday’s closing levels.
Brokerage view and rationale
In its note titled “India Paints | Turning positive; major headwinds from competition behind us,” Nomura said that despite competitors investing nearly Rs 10,000 crore, the impact on Asian Paints’ sales and margins has been minimal. The brokerage expects competition from new entrants, including Birla Opus, to be “measured” going forward and sees a reversion to the company’s 10-year mean P/E levels.
Nomura also upgraded Berger Paints to ‘Buy’ from ‘Reduce’ and raised its target price to Rs 675 from Rs 500, highlighting a positive sector outlook as cost pressures ease and demand improves.
Sector developments and competitive dynamics
Investor sentiment in the paint sector received an additional boost after Birla Opus CEO Rakshit Hargave resigned with immediate effect, just 18 months after launch of the Aditya Birla Group’s paints venture. Hargave is set to join Britannia Industries as CEO from December 15, 2025.
Birla Opus had recently announced that it reached over 10,000 towns and 140 depots, claiming a double-digit market share when combined with Birla White Putty revenues. However, analysts believe leadership churn could slow near-term competitive intensity, indirectly benefiting established players like Asian Paints and Berger Paints.
Additional tailwinds
Adding to the optimism, crude oil prices—a key input cost for the paints industry—fell to a two-week low amid a sharp increase in U.S. crude inventories. This decline is expected to support gross margin expansion for Asian Paints in the coming quarters.
Separately, MSCI has announced an increase in Asian Paints’ weightage in its Standard Index, which is likely to trigger foreign inflows of about $95 million, according to Nuvama Alternative & Quantitative Research.
Upcoming events
Asian Paints is scheduled to announce its Q2 FY26 financial results on Wednesday, November 12, where the board will also consider an interim dividend for shareholders.
At 9:20 AM, the stock was trading at Rs 2,601.40 against the previous close of Rs 2,486.70, with a market capitalization of Rs 2.48 lakh crore. The day’s trading range stood between Rs 2,560.10 and Rs 2,600.00.
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