The paint sector has seen hectic activity over the past few months, with many new players entering the space. If you are wondering what stocks to bet on, in this space, Nuvama Institutional Equities has listed out one of its picks from the paint sector. It has retained its ‘Buy’ rating on Berger Paints with a target price of Rs 670. This implies an upside of 26.4% from current levels.
The brokerage house is betting on Berger Paints’ financials returning to normal levels going forward. Nuvama lists out three factors driving growth for this paint sector stock –
Nuvama on Berger Paints: Euphoria about new players gradually fading
The brokerage house maintained its expectation of a gradual return to normalcy in the sector. They believe the euphoria of a new competitor entering the sector is fading, given flat sales over the past few months. They expect sector dynamics to take
The Nuvama analysts met Abhijit Roy, MD & CEO of Berger Paints, who highlighted that Berger Paints is consistently gaining market share, currently at 21.2%. This is an improvement of 230 basis points between FY22-Q1 and FY26.
Nuvama on Berger Paints: Raising investment to deepen market penetration
Further, the management highlighted that it plans to increase investment in value-added products to deepen market penetration and strengthen brand differentiation. The company is accelerating urban expansion through franchise stores, contract partnerships, and on-ground teams.
Nuvama believe that these measures would support growth, and they expect a recovery from the second half of FY26. This, according to them, will be despite the adverse impact on demand in Q2FY26 as a result of heavy rains.
Berger Paints Q1 FY26 results
Berger Paints reported an 11% YoY decline in Q1 FY26 profit at Rs 315.04 crore vs Rs 354.03 crore in Q1FY25.
The company posted a revenue of Rs 3,200 crore in Q1FY26, growing by 3.5% YoY. Vs Rs 3,091 crore in the same quarter last fiscal.
Berger Paints stock performance
The share price of Berger Paints has remained unchanged in the last five trading sessions. The stock has declined 1.3% over the last one month. Berger Paints’ stock price has erased 13% of investors’ wealth in the last one year.