Share price of Asian Paints rose over 2 percent on the BSE on Tuesday, and the stock was among the best performers on the Nifty50. This came after Credit Suisse maintained its ‘outperform’ rating on shares of Asian Paints and hiked its target price by 5.5 percent to Rs 3,670.

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The paints industry has proved very resilient in the past 18 months despite the pandemic crisis, and continues to witness strong demand conditions after the second wave of COVID-19, Credit Suisse said in its report.

“The early festive season in FY22 and some pent-up demand from 1QFY22 should aid 2QFY22 demand,” the brokerage added.

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Paint companies have made a significant dent in the waterproofing market in India. According to Credit Suisse, Asian Paints has around 25 percent share in the waterproofing market now and has been gaining share consistently.

Initially, Asian Paints played mainly in remedial waterproofing but in the last couple of years, the paint manufacturer is also pushing strongly in the new construction waterproofing segment, Credit Suisse said.

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Revenue of Pidilite, which is the market leader in the waterproofing segment with about 50 percent market share, from construction chemicals has seen a slowdown in growth since FY18 which coincides with Asian Paints' increased aggression in this segment, the global brokerage firm pointed out.

At 1:35 pm, Asian Paints’ scrip was up 0.9 percent at Rs 3,344.15 on the BSE. The stock clocked an all-time high of Rs 3,393.70 on Tuesday.

(Edited by : Ajay Vaishnav)