Berger Paints India Ltd is the third largest paint manufacturer and the second largest decorative paint player in India. The paint market is dominated by decorative paints, which accounts for nearly 70% of the total demand. The rest of 30% belongs to industrial paints–comprising automotive and protective, powder, coil and marine coatings.
The paint industry is raw material intensive and crude is one of the key raw materials in the manufacturing of paints. The company expects raw material prices to remain softer for next few quarters which would help to boost margins.
It has tendency to undergo in consolidation during the market’s corrective phase and upheld that bias even during the bear run of 2000 and 2008. In short, it has been trading in long term uptrend.
In line with its trading pattern, it was trading in a consolidation range for last one year and witnessed an upside breakout from the same of late. The current chart formation and supporting indicators are in the favor of strong surge ahead. Traders should exploit this fresh opportunity to create long position in the given range of 262-267 with close below stop loss of 244 for the target of 318.