Only Indigo Paints (2% market share), one of the tiny players, has managed to generate more than ₹10 billion in annual income during the past 20 years.Sun Direct , has brought unique innovations to the table to give you a matchless viewing experience. The remaining 8% is made up of small players, and MRF Paints is one of them. Nearly 92% of the organised market is taken by Asian Paints, Berger, Kansai, Akzo, and Indigo Paints, the country's top 5 paint manufacturers. The brokerage expects MRF Paints' market share to be relatively low due to the company's focus on southern markets, smaller scale of operations, lower customer awareness, and fewer options in contrast to industry titans. But, we do not believe it to be a significant risk for large players," said the report.Īfter market leader Asian Paints, which has a 53% market share, Berger (approximately 19%) and Kansai Nerolac (about 12%) are in second and third position, respectively, according to the brokerage. "Entry of players such as Pidilite (into interior paints) and Grasim could pull away some market share from other players. This venture is more focused on range completeness than a full-fledged ornamental business. With the introduction of Haisha, it has expanded into the interior emulsion, wall priming, and floor coatings segments. The company has always had a foothold in exterior paints. 'Haisha' brand interior paints were the company's entry into the market, the report said. In the next two to three years, Indigo wants the new segment to contribute 8–10% of the top line. The brokerage claims that with this sector, Apple Chemie will concentrate on B2B while Indigo would concentrate on retail. Additionally, 51% of Apple Chemie was bought, opening up a B2B market for chemicals used in building and water proofing. Indigo Paints has announced its debut into the building chemicals and water-proofing markets. Depots lack direct connect with the market hence, any new player will have to build a dealer network from scratch, which is time-consuming," said the brokerage. While the anticipated new player can utilise cement depots for selling paints, most retail buyers usually go directly to paint dealers. "In our view, a new paints player would have to struggle for five–six years before it begins to impact other players meaningfully. Building consumer brand recall took Indigo eight years of intensive promotional work. Brokerage claims that while the Indian paint market is appealing, the entry is not a cakewalk for the new ones.Īccording to the brokerage, many companies have attempted to enter the paints business in the past using aggressive branding and advertising campaigns, but they have not been successful in gaining any sizeable market share. Grasim (yet to debut), JSW Paints, JK Cement, and Astral have all expressed a strong interest in expanding their paint businesses. Non-paint players have begun exploring the paints market in recent years. Indian paints industry – Attractive but not a cakewalk for entrants The brokerage has maintained "buy" with a target price of ₹3,880. Asian Paints not only kept up its leadership in the sector but also continued to grow market share throughout the year. In FY24, the brokerage expects that decorative volume growth will continue to be in the double digits. Additionally, the company has routinely reported the highest EBITDA margins among paint companies. Pidilite and Berger Paints also performed well, but they fell behind Asian Paints. On volumes, the company is leading the pack with 16% YoY decorative volume growth 4Y volume compound annual growth rate (CAGR) is also in high-teens," said the report.ĭespite its size, Asian Paints is ahead of the competition on a four-year and five-year CAGR basis. Pidilite and Berger Paints also did well on a 4Y-basis. "Asian Paints outclassed both on a 1Y and 4Y-basis. This supports its belief that the leader still has the superior execution strategy. Asian Paints had the strongest results in Q4FY23, according to the brokerage.
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