Paint manufacturing
shares are posting in growing revenues which is citing commencement of Bull Run
in the sectoral industry following the hiking
nifty tips and nifty future tips of paint companies' on
BSE. Stocks tips of performing over the highest expectations of market analyst
starting last month and will probably continue the trend in the coming time.
Equity research lab has premiered first in the market as the shares of the
decorative paint industry set a new life time high in July. Asian Paints and
Berger Paints followed the league as their stocks marked fresh heights on the
stock exchanges as early investors chipped in to buy equities for medium to
long-term gains.
Painting industries growth is standing on pillars of strong demand and
recovery in sectoral growth. The companies backed up with high demand destined
to grow as their key pillar, demand of paints is generally higher during the
festive season, on the way to Indian markets.
The industry advocates a profitable investment as falling of crude oil
prices is another profit jumping news. Crude oil produces titanium oxide which
is a key ingredient in production cycle of plastic paints.
In the first quarter of FY 2014-15, the three major companies in painting
producing sector reported higher revenues pushed up by growth in volumes of
sales. Industrial recovery followed country's economic growth where companies
worked up to regain exploding market share.
Kansai Nerolac headed the industrial sector as it captured 45 percent of
total revenues. Berger paints and Asian paints shared 20 percent each of the
total profits flourished in the segment. Nerolac is leading Indian markets and
standing among the top three positions in the world decorative and painting
industry.
Berger is walking on the strategic motive to capture premium paying audience
by creating higher brand equity value in the market over the previous year. The
company bought out the market share under influence of small dealers unable to
touch Asian Paints brand loyalty customers.
Asian paints is gaining on its strong position in the market which is
consistently paying off its bills. The company nurtures on its key strength of
strong pricing power due to consumer loyalty and trust.
It's expansion plan in the vertical of providing home accessories like
modular kitchens and faucets did not produce estimated results according to
some opposing analyst lower than optimistic analyst who are supporting the
group.
Overall, the company is making a small investment compared to its large
variant of working capital of 3.5 percent. Therefore, the company is still
joyous on its return from painting vertical.
Economists are looking at the sector with blue eyes hoping to see further
growth in the market of decorative paint companies who are launching new
products. Key strength backing up the market growth enlisted is availability of
premium products, regular demand of product and consumers high purchasing
power.
Asian Paints is trading over 32 times FY-16 predicted profits, Berger Paints
over at 27 times, and Kansai Nerolac up at 24 times, against their previous
averages at 30 times, 20 times and 25 times, respectively. All paint companies
are gaining after they prospects of growth improved in the market.
