Paint stocks, which had slipped out of investors’ interest over the past few quarters, are suddenly back in action. The sector had been weighed down by fierce competition after a major business house entered the market, and an unusually long monsoon only added to the drag. Now the tide has turned, and paint companies are once again brightening sentiment on Dalal Street.
Asian Paints edged up to Rs 2,810 in early Wednesday trade, not far from its 52-week high of Rs 2,985.5 hit on December 4, 2025. Berger Paints India climbed to Rs 548.7 in early Monday trade, again close to its recent peak. Indigo Paints also gained nearly 3 percent to Rs 1,235.7, inching toward its 52-week high of Rs 1,506.5.
So why the sudden cheer around paint stocks? The answer lies in crude oil. Paint makers rely on petroleum-based inputs like binders, solvents and resins. With global crude hovering around five-year lows at 60 dollars per barrel, companies are enjoying a meaningful drop in raw material costs. Paint makers typically use a mix of long-term contracts and spot purchases. When oil stays low for an extended period, the savings flow directly into margins.
The gains are clear in Asian Paints’ latest numbers. Its cost of materials stood at Rs 3,063.7 crore in the September 2025 quarter, accounting for about 42 percent of its standalone revenue of Rs 7,356.3 crore. Any relief on raw material costs has an immediate impact on profitability.
Demand, too, is helping. Despite a drawn-out monsoon, Asian Paints reported 10.9 percent volume growth in its decorative business, its highest in almost two years. The early festive season and the GST cut on paints from 28 percent to 18 percent improved sentiment and pushed more customers toward fresh painting and renovation.
Investors expect this momentum to continue through the current construction season, supported by policy steps taken by the government and the RBI to revive activity across real estate and infrastructure.
But the story of the paints sector today is incomplete without the new heavyweight in the room: Birla Opus. The Grasim-owned brand has shaken up the market in record time. Within just a few quarters, it has emerged as the second-largest player in the decorative paints category. According to Grasim’s September 2025 results presentation, Birla Opus already commands a 24 percent capacity share in the organised market. Its wide portfolio of over 190 products and 1,750 SKUs has helped Grasim’s building materials division clock rapid growth, with revenue rising to Rs 22,253.3 crore from Rs 17,342.4 crore a year ago.
The heightened competition has also triggered consolidation. In June 2025, Imperial Chemical Industries and Akzo Nobel sold their 50.46 percent promoter stake in their Indian operations to JSW Paints. With a few large players now dominating the space, investors are watching how market shares settle and which brands emerge stronger.
In the September 2025 quarter, the benefits of lower GST rates and easing raw material prices began to show. Asian Paints saw a 5.6 percent rise in standalone revenue. More importantly, the drop in operating costs helped its net profit jump nearly 60 percent to Rs 955.6 crore.
Berger Paints, however, faced a tougher season due to severe flooding across several key markets, including Kerala, Andhra Pradesh, West Bengal, the north-east, Gujarat and Maharashtra. Even then, the company managed high single-digit volume growth. Its revenue held steady at Rs 2,458.5 crore, though higher expenses pushed its net profit down by 23 percent to Rs 176.3 crore.
From a returns standpoint, the sector continues to deliver strong efficiency. Asian Paints has a standalone return on equity of 20.7 percent, while Berger stands at 20 percent. Indigo Paints, a smaller but fast-growing player, has an ROE of 14.6 percent.
But these strengths come at a price. Valuations for paint companies remain steep. Asian Paints and Berger Paints both trade at more than 60 times earnings, according to Screener.in. Indigo Paints trades above 40 times. Investors are clearly willing to pay a premium for growth visibility, strong brands and improving margins. The market has already priced in the sector’s turnaround, and the next few quarters will show whether the optimism holds.
With lower crude, healthy demand and new competition reshaping the game, paint stocks have returned to investors’ radar in a big way.
