Aggressive prices, discounted by new entrants who strengthen competition in the paint industry | Mint

New -delhi, June 29 (PTI), which reflects an intense competition in the Indian decorative paint industry, with new entrants offering aggressive prices and discounting, the leading players have impacted on sales and margins in FY25, but expect a modest growth this year. The industry, which also has a slowdown of urban markets and the waste of demand, where consumers move to more affordable options, expects a modest growth in FY26, powered by favorable macro economic conditions, rising urbanization and increased construction and infrastructure development activities. Asian paint containing more than 50 percent of the domestic market said that new entrants as well as established players with their ‘aggressive price and discounting strategies’ strengthen competition, which affected the value-giving as well as profitability. The overall poor consumption trends prevailed by FY25 had a dampening impact on the domestic decorative paint market, especially the urban markets, said the vice-chairman of Asian paint, Manish Choksi, at the latest annual meeting of the company. “Subsequent discretionary spending has also led to the expansion of the refilled of cycles and domestic maintenance schedules, which affected the consumption of architectural paint and décor items,” he said, adding, “consumers also moved to more affordable options, even within the premium segments of decorative paints in categories.” Although rural demand showed relative resilience, urban demand contributed to an overall flat performance for the entire decorative paint market, which has been an achievement under the trend over the past 18 months. In addition, challenges in retail consumption were further exacerbated by a greater competitive pressure between new entrants and existing players. “Both the new entrants as well as established players have adopted aggressive pricing and discounting strategies, further strengthening competition in the industry. These dynamics affected the value value as well as the profitability for Asian paint during the year,” Choksi said in his speech to the AJV, of which a copy was presented to the bowling. A level market and intense competition led the company’s decorative paint to record a 5.7 percent drop in value conditions, despite registering a 2.5 percent growth in volume terms. Kansai Nerolac Paints, who expressed similar concerns, said: “In FY 2024-25, the Indian Paints industry showed resilience in the light of subdued demand and strengthened competitive pressure.” The rural question remained a large part of the year, with signs of recovery after the first quarter. The entry of new players in the market has further strengthened the competition, which asked more aggressive pricing strategies, the latest annual report from Kansai Nerolac Paints said. Berger Paints in its latest update of the earnings call said in FY25, on an independent basis its “value growth of it was dampened despite the volume momentum, influenced by the full year effect of the FY24 price reduction, the softer consumer demand and traction in the space of construction chemicals”. Asian paint, Berger Paints and Kansai Nerolac are the most important players in the Indian paint industry, who are reportedly controlled by three-fourths of the market. In the past 5-6 years, several new players have entered this market, including Pidilite with Haisha Paints, Grassim with its Birla Opus and JSW Paints. Besides, the manufacturer of pipes and accessories obtained Astral Gem Paints, while JK Cements acquired Acro paint, which led to a spread of the sector. Last week, JSW Paints, part of Sajjan Jindal-led USD 23 billion JSW Group, announced a controlling stake in Akzo Nobel India Ltd, the producer of Dulux Paints, for £ 12,915. The Indian paint industry is led by Asian paint. In addition, Berger, Kansai Nerolac, Akzo Nobel India (Dulux), Indigo Paints, Shalimar Paints and Nippon Paints are other brands. However, paint makers expect a silver lining in FY26, and count on several factors. “The decorative segment is ready for an improved performance, supported by a backlash in urban demand, powered by higher disposable income from recent tax incentives and inflation alleviation. It is also expected to maintain rural growth, supported by predictions of an above -average monsoon,” says Berger Paints India. Kansai Nerolac Paints expects a ‘modest growth’ in the Indian Paints industry in FY26, powered by favorable macroeconomic conditions “in the decorative segment, growth will be supported by higher disposable income, premiumization trend, an increasing consumer preference for eco-friendly products, and government initiatives such as the ‘ Cities mission ‘,’ It is said. According to a direct report from the ICICI, the size of the Indian Paints and Coatings market in 2024 at USD 9.60 billion is estimated. It is expected to reach dollars by 2029, which grows at a 9.38 percent CAGR between 2024 and 2029.