InvestorQ : Do you think it is a good idea to paint stocks like Asian Paints, Berger, Nerolac and others?
manisha Kolvenkar made post

Do you think it is a good idea to paint stocks like Asian Paints, Berger, Nerolac and others?

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Crowny Pinto answered.
4 weeks ago
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Most paint companies in the decorative segment have been touching 52-week highs even as industrial paints leader Nerolac is also catching up. Volume recovery is expected to gather momentum in the December quarter. Retail volumes are likely to be led by low cost products like emulsions, putty and waterproofing and adhesives segments. That is where the paints companies are focusing on now.

But, input cost could be a big challenge. Price of titanium dioxide or TIO2, a key input, is up 23% since October. TIO2 constitutes about 25% of the paint content. Then there is the sharp hike in crude prices, which is also a key input for paints. Risks are high because China is the world’s largest exporter of TIO2. Most Paints are at rich valuations like Berger at 117X P/E, Asian Paints at 95X and Kansai Nerolac at 65X.

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