Analysts say 'Buy' again on Berger Paints despite Q2 blip; top details here

Nuvama on Berger Paints: Berger Paints’ fundamentals remain intact even as the company manoeuvres short-term headwinds in the September quarter (Q2FY26), analysts at Nuvama highlighted after a recent interaction with Abhijit Roy, managing director and chief executive officer of the company. 

 

While above-normal rains are likely to weigh on Q2FY26 volumes, the brokerage continues to maintain a ‘Buy’ rating with an unchanged target price of ₹670, citing strong market positioning, structural growth levers, and clear headroom for expansion.

 

“In spite of some adverse impact on demand in Q2FY26 due to high rains, we estimate a recovery H2 onwards. Retain ‘Buy’ with an unchanged target price (TP) of ₹670,” said Abneesh Roy, Jainam Gosar and Shlok Mehta of Nuvama, in a note dated September 9.

 

 

On the bourses, Berger Paints shares were trading 0.75 per cent higher at 533.60 per share, around 9:20 AM. In comparison, BSE Sensex was trading 0.43 per cent higher at 81,453.23 levels.

 

Meanwhile, here are the key reasons behind the bullish call:

 

Market share gains continue

 

Berger Paints has steadily expanded its presence in the decorative paints space, now commanding a 21.2 per cent market share – an increase of 230 basis points (bps) since FY22, analysts noted. The company logged its sharpest share gain in Q1FY26, driven by aggressive penetration in semi-luxury and premium categories, where Berger Paints is already a leader. In industrial coatings too, the company continues to dominate in protective coatings, underscoring its stronghold in multiple segments.

 

Demand outlook: Recovery ahead

 

The Management has acknowledged that Q2FY26 demand has been hit by prolonged rains, which delayed painting activity across regions. However, this is seen more as pent-up demand rather than lost demand, with a rebound expected in the second half of the year. Analysts expect volumes to rise 7-9 per cent post-monsoon, supported by a recovery in urban markets, steady rural momentum, and signs of rationalisation in competition.

 

Competition check

 

The much-discussed entry of new players has so far failed to dent Berger Paints’ growth trajectory meaningfully. According to management, aggressive dealer rebates by newer entrants are proving unsustainable, with sales largely flattening in recent months. On the Akzo Nobel-JSW Paints transaction, Berger Paints foresees a temporary bump in advertising spends but no major rise in competitive intensity.

 

Urban push, dealer expansion

 

Berger Paints is doubling down on urban expansion through franchise stores, contractor tie-ups, and premium brand positioning, even as it maintains rural strength. Currently, its dealer network is only 40 per cent of the category leader’s, suggesting considerable scope for growth. The company is also expanding its tinting machine network – 43,000 dealers already equipped, with another 7,000 to be added in the next year.

 

Capacity, innovation in focus

 

The paint company is also scaling up its capacity with the fully operational Sandila plant and upcoming facilities in West Bengal and Odisha, which will add considerable output in FY26. 

 

Meanwhile, innovation remains a core growth lever, with recent decorative launches such as ‘Kool Range,’ ‘Kolor Plus,’ and ‘Luxol Metallics’ contributing to its value-added portfolio.

 

Overall, despite a Q2 soft patch, analysts believe, Berger Paints’ structural growth story remains intact, boosting analyst conviction in its long-term trajectory.