Paint stocks rally on falling oil prices: Shares of paint companies were trading higher on Wednesday, rising up to 5 per cent on the BSE, on the back of a fall in crude oil prices. Crude oil is a key component in the production of certain raw materials used in the manufacturing of paints, such as solvents and resins.
On the bourses, Asian Paints, Berger Paints India, Shalimar Paints, Kansai Nerolac Paints, Indigo Paints, and Akzo Nobel India gained in the range of 1 per cent to 5 per cent intraday today. By comparison, the BSE Sensex was down 0.64 per cent at 82,025 at 09:34 am.
US crude oil futures were down over half a per cent on Wednesday, extending their over 4 per cent fall on Tuesday, on signs of a deal to resolve a dispute that has halted Libyan crude production and exports. Bretn crude oil, meanwhile, tumbled 4.9 per cent Tuesday and was down 0.6 per cent today.
Oil prices posted their lowest close since December Tuesday, and have erased all gains for the year.
Paint industry outlook
Fundamentally, the paints industry’s prospects are intricately connected to the overall growth of the country’s economy. India’s huge population, positive demographics, increasing urbanisation, increasing disposable income, recovering automotive industry, and the government’s push on infrastructure development are some of the factors which are, directly and indirectly, driving the demand of paints (both decorative and coatings products) in India.
On the flip side, fluctuations in raw material prices and stringent environmental regulations regarding volatile organic compounds (VOC) are likely to hamper the market’s growth. The use of nanotechnology in the paints and coatings industry and the rising demand for eco-friendly paints are expected to offer various market growth opportunities in the near future.
Asian Paints’ management said they expect demand conditions to improve in the near term on the back of improving rural sentiment and a gradual pick-up in monsoons. Shares of Asian Paints surged nearly 3 per cent to Rs 3,232 on the BSE in the intraday trade today.
India’s paints and coatings market, encompassing both decorative and industrial segments, was valued at $13,405.4 million in the fiscal year 2024, and is projected to reach $31,706.3 million by FY2033, with a forecasted Compound Annual Growth Rate (CAGR) of 8.75 per cent.
“The country’s burgeoning populations, coupled with rapid urbanisation, are driving the demand for paints and coatings in various sectors. Urban development initiatives such as the Smart Cities Mission and Housing for All, further stimulate construction activities, creating a significant opportunity for the pain and coating industry,” Indigo Paints had said. Shares of Indigo Paints rallied 5 per cent to Rs 1,524 on the BSE in the intraday trade Wednesday.
First Published: Sep 04 2024 | 10:17 AM IST
