Paint Stocks Dip: Analysts Warn of Slow Recovery, Muted Growth Outlook

• Paint stocks traded lower on February 18, influenced by muted outlooks from HSBC and Macquarie.
• HSBC highlighted potential structural concerns and limited tailwinds, reiterating 'hold' ratings on Asian Paints and Berger Paints due to elevated valuations.
• Macquarie noted slower Q3 sales growth and a guarded demand outlook, expecting moderate recovery in H2 2024.
• Macquarie prefers Asian Paints, followed by Kansai Nerolac and Berger Paints, citing Asian Paints' lower margin impact from Grasim's competition.
• Asian Paints, Berger Paints, and Kansai Nerolac shares were largely in the red, with Berger and Kansai Nerolac down up to 0.6%.