Lower oil prices, volume uptick to help paint firms get their shine back

The rise in oil prices had earlier led to muted profitability outlook for paint companies and investors shying away from their stocks

With crude oil prices cooling off and the rupee strengthening a tad against the greenback, paint companies are expected to be major beneficiaries. This is because, prices of key raw materials, besides packing materials, are linked to crude oil prices. The stocks of three paint companies — Asian Paints, Berger Paints and Kansai Nerolac (Nerolac) — surged 15-23 per cent over the last one month vs the 2.6 per cent rise in the S&P BSE Fast Moving Consumer Goods (FMCG) index. A fall in valuation after the recent correction in the FMCG space too supported the rally in the stocks.