India’s leading paint companies are entering the festive season with confidence, expecting housing, infrastructure and automobile demand to sustain double-digit growth through FY27.
However, the positive outlook is being tempered by rising input costs, crude oil volatility and intensifying competition across almost every price segment.
Asian Paints, Berger Paints, Kansai Nerolac Paints and JSW Dulux have indicated that underlying demand remains healthy despite an uncertain cost environment. Several players have already raised prices to offset higher raw-material costs, while further increases are expected to support revenue growth and protect margins in the coming quarters.
Asian Paints, India’s largest paint manufacturer, is targeting volume growth of around 8-10% in FY27. Managing Director and Chief Executive Officer Amit Syngle said demand remained decent during the June quarter and expressed optimism about the festive season.
“We are entering a festive quarter where the month of September becomes good enough from some festive sales,” Syngle said, adding that the company expects volume growth to remain in the 8-10% range during the third and fourth quarters.
Asian Paints reported a 39.6% year-on-year rise in consolidated net profit to Rs 1,559.45 crore in the June quarter, while revenue from operations increased 18% to Rs 10,541.94 crore.
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While metro cities and larger urban centres continued to lag smaller towns, stronger government-led business-to-business spending in major cities provided some support. With petroleum-derived materials accounting for a substantial portion of the industry’s raw-material basket, crude oil prices remain one of the biggest variables for paint manufacturers.
Companies are, therefore, increasingly relying on pricing to cushion the impact of higher input costs.
Berger Paints expects double-digit revenue growth to continue in FY27, helped by the full-quarter contribution from recent price increases.
Managing Director and CEO Abhijit Roy said the company expects second-quarter volume growth to remain broadly in line with the first quarter, although it could be marginally lower.
Berger recorded volume growth of around 8.5% in the first quarter and expects it to moderate to about 7.5-8%.
At the same time, the company is looking at price increases of roughly 7.5-8.59%, which should help offset some moderation in volumes and support overall revenue growth.
Kansai Nerolac Paints is also pursuing further price increases. Managing Director Pravin Chaudhari said decorative paints could see an additional price impact of around 3% in the second quarter, while industrial paints may become 3-5% costlier.
The company had already implemented a price increase of around 5% during the first quarter.
Despite resilient demand, the sector remains exposed to several external risks. Crude oil prices, petrochemical derivatives, currency movements and global supply-chain disruptions can have a direct bearing on manufacturing costs.
A sharp rise in crude prices could squeeze margins and force manufacturers to announce additional price increases. But passing on the entire cost burden may prove difficult if competitors adopt aggressive pricing strategies to gain market share.
For now, Kansai Nerolac expects infrastructure, construction and automotive demand to provide continued support to the business.
JSW Dulux, formerly Akzo Nobel India, is similarly optimistic. Joint Managing Director and CEO Rajiv Rajgopal said growth remained fairly strong, with July recording healthy numbers despite the month typically being relatively weak because of monsoon-related factors.
The company continues to target double-digit growth in both volume and value. “We believe that the festive demand is going to be continuously strong. We see no issue there,” Rajgopal told PTI.
Strong demand, however, has not eased competitive pressures in the paint industry.
The market has become considerably more crowded over the past five to six years, with both new entrants and established companies increasing investments in manufacturing, distribution and branding.
Pidilite Industries has entered the segment through Haisha Paints, while Grasim Industries has launched Birla Opus. JSW Paints has also expanded its footprint, increasing pressure on incumbent players.
Asian Paints’ Syngle said competition remains intense across economy, premium and luxury categories. “The competitive environment continues not only from one player or two players, but across all players,” he said, indicating that elevated competitive intensity is likely to persist.
The economy segment has been particularly aggressive, with companies offering higher discounts to attract dealers and contractors.
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However, according to Syngle, the competitive gap between economy and premium categories is not particularly significant.
The shift points to a broader battle for market share, with companies strengthening distribution networks, expanding product portfolios and competing for customers across price points rather than focusing on a single segment.
With Asian Paints, Berger Paints and Kansai Nerolac continuing to command a significant portion of India’s organised paint market, the growing presence of newer players could further alter the industry’s competitive dynamics.
For FY27, the paint sector therefore faces a delicate balancing act. Healthy festive demand, construction activity and infrastructure spending could keep volumes growing, while price increases may provide a lift to revenues.
Yet volatile crude prices, a weaker rupee, rising import costs and an increasingly aggressive fight for market share could continue to challenge margins and profitability.
(With PTI inputs)
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