National brokerage firm ICICI Securities has said that primary sales of paints, according to paint dealers, were materially affected (rejected for some dealers) in October and November last year. The report said there was an increase in trade stocks in the base quarter due to the 22 percent price increase. However, consumer buying has been largely flat.

Traders, according to the report, expect the market to remain subdued for the next 3-4 months and expect a recovery only in the first quarter of FY24. The report cites four reasons for the impact:

1. There is a resurgence of smaller/disorganized players. They are likely to regain some lost market shares.

2. While paint inflation has now cooled, job inflation remains high and is likely to result in higher overall paint charges.

3. Due to increased spending on travel/tourism, automobiles, weddings, and festivals, painting spending has moderated slightly.

4. Previously, consumers used to pay separately for painting and waterproofing charges, but now painters offer both services and it translates to some savings for consumers.

ICICI Securities has tagged Akzo Nobel as Buy and says it is the only paint material in its hedge that is preferred as a trade pick.

For Asian Paints, Kansai Nerolac and Indigo Paints, the brokerage has tagged a Hold rating and has given Berger Paints a Reduce rating.

Meanwhile, brokerage firm Macquarie in a report said it is bullish on Asian paints. It has maintained an upper rating and revised the price target to Rs 3,750 from Rs 3,700.

At Berger Paints, it has cut the target price to Rs 500 from Rs 525 while maintaining the underperform rating.

Individually on NSE today, Asian Paints traded at Rs 3,034.85 per share, Berger Paints at Rs 577.90, Kansai Nerolac at Rs 430.90, Akzo Nobel at Rs 2,241.10 and Indigo at Rs 1,307.50 each at around 1pm.

Click here for more stock market updates I Journalpur Business Live