Morgan Stanley in its recent reports increases the EBITDA Margin expectations for the top 2 Indian paint companies. However, it still keeps the companies as ‘Underweight’. Asian Paints is the biggest paint manufacturer in India followed by Berger Paints. However, despite the fall in crude oil prices, Morgan Stanley has not changed its reports on the company’s performance. According to the company, Asian Paints and Berger Paints will still be Underweight. At the same time, it increases the company’s earnings estimate.
What did Morgan Stanley Say About Asian Paints and Berger Paints after the Crude Oil Price Fell?
Morgan Stanley is a financial services corporation. It provides a report on the performance of Asian Paints and Berger Paints recently. According to the details, both companies are still underweight. Even after the crude oil price fell to its lowest. The reports are still the same. However, Morgan Stanley has changed the company’s EBITDA margin expectations by raising it a little. If we talk about Asian Paints, Morgan Stanley expects the rise to 19%. It was earlier 18.4%. It also expects a rise in its earnings by 4%. On the other hand, the corporation expects a rise in Berger’s EBITDA to 16.2%. It was earlier projected at 15.5%.
The Berger Paint’s projection for earnings also increased by 7%. However, if we talk about the shares of these companies, there is not much growth in both companies. Asian Paints’ share price had a closing at Rs. 3320 per share. It opened at Rs. 3310.75 per share providing a growth of 0.55% on Monday. While Berger Paints is currently having a share price of Rs. 622.30 per share. The company’s shares closed at Rs. 622.55 per share. It opened at Rs. 616.50 per share providing a growth of 0.77% on Monday. However, Morgan set the target price for Asian Paints at Rs. 2,522 per share. For Berger Paints, it sets a target price of Rs. 497 with a 20% downfall.
Along with the performance of the paint industry, it is also crucial to know the relationship between the paint industry’s performance and crude oil. The paint industry has its maximum raw material coming from crude oil. The percentage is almost 55-60%. Thus, major materials like Titanium Dioxide are received from the process. Thus, the fall in crude oil prices benefits the companies. It helps them get the raw material at a cheaper price. Thus, they get the opportunity to earn more profit and expand their business further. Stay tuned for more information on our website.