Paints set for stronger H2, says Nuvama; Asian Paints, Pidilite favourites

Asian Paints has regained momentum and is set to maintain its dominance after outperforming the industry in the September quarter, Nuvama said

Nuvama Institutional Equities expects the paints industry to post 7-8 per cent year-on-year (Y-o-Y) volume growth in the December quarter, followed by early double-digit growth in the March quarter, amid improved demand through November and December. 

 

The brokerage said the second half of the financial year 2025-26 (FY26) is likely to outpace the first, supported by a strong wedding season, higher disposable income following GST cuts, and pent-up demand after an extended monsoon.

 

Further, Nuvama said margins are set to expand in the second half on the back of benign input costs and operating leverage. Admist this, analysts said that Asian Paints and Pidilite Industries remain the top picks and added that they prefer Asian Pains over Berger Paints in the near term. 

 

Asian Paints reported a 43 per cent Y-o-Y jump in net profit for the second quarter, while Pidilite Industries reported an 8.2 per cent jump.

 

According to the brokerage, Asian Paints has regained momentum and is set to maintain its dominance after outperforming the industry in the September quarter. Stronger execution, regional micro-marketing, innovation, premiumisation and an aggressive push in mass-media visibility helped the company widen its lead, it said. High entry barriers, a deep distribution network, extensive tinting-machine placements and sustained brand trust remain core moats for incumbent players, Nuvama added.

 

The note also highlighted senior management changes at Birla Opus. Chief Executive Officer (CEO) Rakshit Hargave has resigned 18 months after the company entered the paints business and will join Britannia Industries Ltd. as CEO from December 15, 2025. Nuvama said Britannia stands to benefit from his experience across consumer companies including Beiersdorf, Hindustan Unilever and Jubilant FoodWorks.

 

While Birla Opus delivered strong performance in its initial quarters, its business has settled into a quarterly run rate of ₹900-1,050 crore over the past three quarters. Nuvama expects the company to appoint a new CEO from a large consumer business within six months.

 

On the regulatory front, Nuvama noted that India’s five-year anti-dumping duty on liquid epoxy resins (LER) would weigh on industrial paints and certain adhesive segments, though the overall impact is expected to be limited.

 

Nuvama Institutional Equities said Berger Paints’ gross margin is likely to improve by 100-150 basis points in the second half of FY26, supported by benign raw material prices and a favourable product mix.

 

Asian Paints has maintained its Ebitda margin guidance of 18-20 per cent, it noted and for Indigo Paints, the brokerage expects Ebitda margins in FY26 to improve on the back of a better product mix, softer raw material costs and a stronger recovery in demand.