The December quarter is typically the brightest for Indian paint companies as consumers rush to refresh homes before Diwali. However, the canvas isn’t smooth this year.
Demand for paints has been soft, though September showed some pick-up, said an analyst. With Diwali coming in early during the October-December third quarter, the window is shorter in terms of the number of days available for painting.
Investors in paint companies can only hope the momentum sustains after Diwali, when broader demand trends will become clearer.
The bigger shift is strategic, with the capacity race largely over. Now it’s about distribution muscle, brand pull, and dealer stickiness. That’s where incumbents like Asian Paints Ltd and Berger Paints India Ltd have decades of goodwill and deep networks to defend turf.
Grasim Industries Ltd’s Birla Opus is trying hard to punch through. The company has expanded its network to around 50,000 dealers and is signing on large-format counters to boost throughput. It has also launched ‘Opus Assurance’, a digital warranty certificate that covers both paint and labour costs in case of failure, along with financing schemes and professional painting services.
Gaining market share is a near-term priority for the management. Birla Opus is aiming for revenue of ₹10,000 crore by 2027-28, which would be its third year of full-scale operations, and profitability at the operating level. Starting from a smaller base, the company has seen notable market share gains since launch in February last year. The moot question is if it can sustain share gains when the sector isn’t firing on all cylinders.
Having largely hit its dealer targets, Grasim is now focusing on pushing more volumes through existing counters. As Motilal Oswal Financial Securities pointed out in a 25 September report, “Traction in the paints and B2B e-commerce businesses has exceeded our expectations, with steady revenues and market share growth over the past few quarters. Although losses in these new business verticals seem to have peaked, the key monitorable for us will be the reduction of losses over the next few quarters.”
The elephant in the margins
JSW Paints, meanwhile, is betting big on scale through its proposed acquisition of Akzo Nobel India Ltd. Distribution overlap, raw material sourcing, and media synergies all seem good. But integrations rarely run smooth.
Besides, the company’s flagship pitch—‘Any Colour One Price’—may face pressure in a market where ad spends, rebates and dealer incentives are climbing. Not all is lost though.
“While Akzo Nobel is strong in metros, tier-1 cities and east India, JSW Paints has a deeper presence in the South. There is potential to cross-sell products through a merged dealer network, with added synergies in raw material sourcing and media buying,” ICICI Securities said in a 9 September report.
To be sure, margins are the other elephant in the room for all paintmakers. Anti-dumping duties on titanium dioxide could nudge input costs higher. As advertising wars intensify, profitability risks loom, leaving little room for complacency. Amid the industry’s muted growth outlook, can incumbents defend share and protect earnings simultaneously?
Shares of Asian Paints and Berger are down around 30% and 17% over the past year. Valuations still don’t offer comfort. The stocks trade at 52 times and 47 times FY26 estimated earnings, respectively, as per Bloomberg. For now, the battle for India’s walls is heating up. Third-quarter festive quarter results may reveal whether the challengers are really cracking open the market.
