HSBC Hikes Target for Asian Paints and Berger Paints on Improved H2 Outlook; Stocks Gain
Shares of Asian Paints Ltd and Berger Paints Ltd rose on July 9 after global brokerage firm HSBC raised its target prices for both companies, citing expectations of a recovery in demand in the second half of the financial year 2025–26 (H2FY26). The brokerage maintained its “buy” ratings on the two leading paint manufacturers, signaling optimism around sectoral growth amid easing competitive pressures.
HSBC increased its target price on Asian Paints from ₹2,700 to ₹2,900 and on Berger Paints from ₹620 to ₹640. The move came as the brokerage noted that market dynamics appear to be stabilizing following the entry of Grasim Industries’ Birla Opus brand. According to HSBC, promotional offers and dealer incentives have now reached a broad equilibrium across major players, a shift that could temper competitive intensity and stabilize margins.
At 9:23 a.m., Asian Paints was trading at ₹2,512, up 1.1%, while Berger Paints saw a 1.2% gain, reaching ₹589.80 per share.
Birla Opus Entry Sparks Market Recalibration
The debut of Birla Opus, Grasim Industries’ ambitious foray into the paints business, has sparked a recalibration across the sector. HSBC commented that Birla Opus’ revenue targets imply a notably high throughput per tinting machine — something it termed a “big ask.” Despite this, the brokerage remains bullish on broader industry trends, especially in the latter half of FY26.
“The intensity of competitive disruption seems to be balancing out,” HSBC stated, adding that paint demand is likely to pick up momentum post-monsoon, with improvements expected in housing and infrastructure activity.
ICICI Securities Also Turns Positive After Years of Caution
In a separate development, domestic brokerage ICICI Securities recently reversed its long-standing cautious stance on the paints sector. After nearly four years of maintaining a negative view, the firm upgraded its ratings on both Asian Paints and Berger Paints from ‘reduce’ to ‘add’, citing signs of a turnaround in the industry’s growth trajectory.
ICICI expects revenue growth for the sector to recover in FY26, following a sluggish FY25. However, the brokerage stopped short of issuing a ‘buy’ call, citing concerns about valuation sustainability in a more competitive market.
In its research note, ICICI highlighted that Birla Opus could capture close to 10% market share over the next three years. The entry of new players like JSW Paints, Akzo Nobel India, and Indigo Paints is also reshaping the market landscape. This could lead to an intense fight for the third-largest market position, especially as Kansai Nerolac tries to hold its ground.
The brokerage further noted that over the last decade, some upstart brands have successfully challenged legacy players, indicating that earlier assumptions about strong entry barriers in the paints industry may have been overstated.
“Birla Opus, JSW Paints, and Indigo Paints have already proven that the entry barriers in this industry are weaker than previously believed,” ICICI Securities said. “This raises questions around exit multiples for incumbents, even as revenue recovery improves.”
Outlook: Sector May Be Poised for Consolidation and Innovation
With competitive dynamics maturing and demand recovery on the horizon, analysts believe the Indian paints sector could be heading into a phase of consolidation and innovation. Established players like Asian Paints and Berger Paints may benefit from their wide dealer networks and branding strength, while newcomers push for innovation and pricing disruption.
Investor interest is expected to remain high, especially as both global and domestic brokerages align in their positive outlook for H2FY26. The coming quarters could be pivotal in determining how incumbents and challengers carve out their market shares in an increasingly competitive industry.
