Paint stocks rose sharply on Friday, with Asian Paints emerging as top Nifty gainer and Berger Paints jumping nearly 6 percent, after Investec turned more constructive on the sector. The brokerage firm said the most intense phase of competition triggered by Birla Opus’ aggressive expansion may now be behind the industry.

Asian Paints Ltd emerged as the top gainer on the Nifty index, rising 2.7 percent to Rs 2,598 in late morning trade. Berger Paints India Ltd jumped over 5.6 percent to Rs 515.75, while Kansai Nerolac Paints Ltd gained 1.6 percent to Rs 214.85. Indigo Paints Ltd also climbed 2.3 percent to Rs 945.55.

The rally in paint stocks came even as the broader market traded lower. At 11:54 am, the Sensex was down 423 points, or 0.54 percent, at 77,421.58, while the Nifty fell 118 points, or 0.49 percent, to 24,208.30.

Investec upgraded Asian Paints and Berger Paints to “Hold” from “Sell”, while raising Kansai Nerolac and Indigo Paints to “Buy” from “Hold”. The brokerage also increased its FY28 estimates and target prices across the sector, citing improving industry structure and a better margin outlook.

Berger Paints Q4 FY26 earnings are due to be released on 12 May, while Asian Paints is scheduled to announce the results on 29 May.

According to Investec, its cautious stance on the paints sector over the past three years was largely driven by aggressive expansion by Birla Opus, which captured a meaningful share of incremental industry growth and pressured profitability across incumbents.

However, the brokerage now believes the peak competitive intensity may be over. It expects Birla Opus’ incremental market share gains to moderate to around 1.5-2 percent, compared with nearly 3-4 percent over the previous two years.

Investec estimated that Birla Opus had already reached around 8 percent market share by the fourth quarter of FY26, and said the company now appears to be shifting focus towards reducing losses and improving profitability.

The brokerage pointed to the rollback of certain trade schemes, including extra quantity offers, along with recent price hikes aimed at offsetting rising raw material costs, as signs of improving pricing discipline in the industry. Birla Opus is targeting breakeven by Q4FY27, according to Investec.

On Kansai Nerolac, Investec said valuations at around 24 times FY28 earnings appeared attractive. It is supported by a recovery in auto demand, premiumisation initiatives and expansion into categories such as construction chemicals, waterproofing and wood finishes.

For Indigo Paints, the brokerage said valuations at around 22 times FY28 earnings remained reasonable; the company is expected to continue growing faster than larger peers while maintaining healthy margins and return ratios.