Asian Paints shares zoom nearly 6%, Berger Paints surge more than 3%; what is fuelling the rally?

Asian Paints jumped as much as 5.8% to ₹2,631 on the NSE, while Berger Paints stock advanced as much as 3.22% to ₹554.80.

This is because, in its filing to stock exchanges on Wednesday, Grasim Industries announced that Rakshit Hargave, CEO, Birla Opus Paints, has resigned from the position with effect from November 1, 2025, to pursue career opportunities outside the company.

The filing added that Rakshit Hargave joined the company in November 2021 and has played a significant role at the Birla Opus start-up stage of the decorative paints and the initial scaling up of the business.

"He has helped build a high-performing team and, in this 4-year phase, established six integrated manufacturing facilities and scaled distribution and supply chain networks nationwide. These will form our strong foundation as the company grows its Paint brand and business ahead," the company said.

The Board appreciated his contribution from the ‘Project to Launch’ phase of Birla Opus and wished him the best for future endeavours, the filing added.

It must be noted that Birla Opus Paints was launched on February 22, 2024, by the Aditya Birla Group. The launch included the inauguration of three manufacturing plants in Panipat (Haryana), Ludhiana (Punjab), and Cheyyar (Tamil Nadu).

The sudden exit of Rakshit Hargave barely 18 months after the company's launch is surprising. The analysts tracking the sector and company said that the channel checks indicate no growth at Birla Opus over the past 6–7 months. Paints remain a high-entry-barrier business.

Following the development, leading investment firms have turned bullish on legacy players such as Asian Paints and Berger Paints, which witnessed competition after the entry of players such as Birla Opus Paints and JSW Paints.

According to news reports, analysts noted that the feared disruption in the paint sector did not materialise, as the existing paint majors have strong moats.

What analysts interpret

According to news reports, Nomura has turned positive on Asian Paints and Berger Paints, saying major headwinds from competition are behind us.

The report said that the share prices of Asian Paints and Berger Paints have undergone significant moderation of around 25%/11% since January 2024. This was largely due to (1) the fear of disruption from Birla Opus (launched in Feb-2024) owing to its large, unprecedented investment of ₹100 billion and the potential impact on sales growth and profitability of the legacy players; and (2) they entered a weak demand phase in FY25 after witnessing a strong/preponement of volume growth of c. 15-17% over FY21-24 post-COVID, leading to 2.5%/7.5% volume growth in FY25.

These headwinds led to P/E multiple de-rating for the stocks.

"While FY24 volumes did not see much impact (growing by c. 10%), FY25 volumes were impacted by a mix of weak industry demand (seen across the consumption sectors) and Birla Opus gaining share. However, the impact on margins was just about 200/100 bp and within their long-term normative band. We note there has not been any major disruption on product prices, dealer margins or company margins thus far when it ideally could/should have been at its peak during the launch/expansion phase," analysts at Nomura said, as reported by news channels.

Other factors behind the rally

Another factor driving the surge in Asian Paints’ stock is the recent announcement by MSCI that eight stocks, including Asian Paints, will see an increase in their index weightage, while six will experience a reduction. Consequently, India’s overall weight in the MSCI Standard Index will rise from 15.5% to 15.6%, and the number of Indian companies represented in the index will grow from 161 to 163.

The stocks gaining higher weightage include Asian Paints, Apollo Hospitals, Lupin, SRF, Suzlon Energy, YES Bank, Alkem Laboratories, and Jubilant Foodworks.

About Asian Paints

Asian Paints is a leading Indian paint and decor company, founded in 1942. It is India's largest paint company and ranked among the top 10 decorative coatings companies worldwide. The company manufactures and sells a wide range of decorative and industrial paints, as well as home decor products like modular kitchens, wardrobes, bath fittings, and lighting.