Paint sector: Valuation derating on the cards?

A lot of action is happening in the paint industry. Asian Paints and Berger Paints, the long undisputed leaders, are now facing the heat of competition. With so many players, many of them biggies in allied sectors, entering the fray, the sector is just starting a valuation de-rating cycle. This is not the time to hold paint company stocks

Sachin Pal
Neha Gupta
June 08, 2022 / 10:22 AM IST
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India's paint sector has demonstrated strong demand resilience in the last few years, owing to the government’s thrust on affordable housing, shorter re-painting cycles and uptrading by customers. The sector has clearly turned out to be an outlier in the overall consumption basket, with the introduction of GST, the IL&FS crisis and COVID lockdowns having little impact on paint consumption. The market leaders -- Asian Paints and Berger Paints -- have consistently delivered superior earnings growth through business cycles. As a...