Paint makers expect healthy FY27 demand amid price hikes; competition intensity remains high

New Delhi: Leading paint manufacturers expect double-digit growth to continue into the festive season even as they push through fresh price increases to offset input cost pressures, and the fierce competitive intensity across price segments in the sector shows no signs of easing.

Asian Paints, Berger Paints, Kansai Nerolac and JSW Dulux expect sustained demand from housing, infrastructure and automotive sectors, though they also remain wary of uncertainty in crude-linked raw material costs amid geopolitical tensions as the bulk of their production costs rely on petroleum-derived resources.

Berger Paints and JSW Dulux projected double-digit growth and Asian Paints guided for 8-10 per cent volume growth for FY27.


Also read: Berger Q1 net profit jumps 29% as decorative paints drive growth

The top leadership of the leading listed paintmaker in their latest earnings calls reported healthy growth in the June quarter and indicated that price hikes taken during the first quarter will continue to support revenues in the coming months.

Asian Paints Managing Director and CEO Amit Syngle said demand conditions remained "decent" through the quarter and the company continues to expect volume growth of 8-10 per cent for FY27.

"We are entering a festive quarter where the month of September becomes good enough from some festive sales. As we look at even quarter three, quarter four, overall, we have given our direction that we should stay in the volume region of about 8-10 per cent," he said.

Asian Paints, the country's largest paint maker, reported a 39.6 per cent jump in consolidated net profit at Rs 1,559.45 crore for the June quarter of FY27, with revenue from operations rising 18 per cent to Rs 10,541.94 crore.

Syngle said demand conditions were "decent" through the quarter, though growth in metro and large urban markets (T1, T2) trailed that in smaller towns (T3, T4), a shortfall he said was offset by strong government-led B2B spending in bigger cities.

Also read: JSW Dulux’s profit from retained business doubles on year in June quarter

On competition, Syngle said rivalry remained intense "across the board" - economy, premium and luxury segments alike - and predicted it could sharpen further in the economy segment, where heavier discounting helps convert contractors. He said the gap between economy and premium in competitive pressure "is not much different."

Similarly, Berger Paints MD and CEO Abhijit Roy projected double-digit revenue growth to sustain through FY27, on the back of the full quarterly impact of price hikes taken in the second quarter.

Replying to a query on growth in Q2, he said: "The volume growth will be somewhere around similar levels as quarter one, slightly below maybe, so we were at 8.5 per cent, maybe it will be 7.5 to 8 per cent, approximately, and a price increase which is there, varying from 7.5 to 8.59 per cent."

When asked about the competition intensity, he said it remains "intense" and "challenging".

Kansai Nerolac Paints Managing Director Pravin Chaudhari said geopolitical conflicts, supply-chain disruptions, elevated crude oil prices, uncertainty over raw material availability, rupee depreciation and higher import costs are still key risks for the sector.

On pricing, Chaudhari said: "In quarter 2, I believe decorative paints, we should see an additional 3-odd per cent, which will flow through, which we did not last quarter. And industrial(paints), I guess, it will be another maybe 3 per cent to 5 per cent." The company had already taken a roughly 5 per cent hike in the first quarter, he said.

However, he noted that demand from infrastructure, construction and automotive sectors remains supportive.

JSW Dulux (formerly Akzo Nobel India) said growth remained "fairly strong," with July - typically a weak month due to a delayed monsoon - still delivering healthy numbers. Its Joint MD and CEO Rajiv Rajgopal said the company continued 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 earlier told PTI in an interaction.

The industry has already implemented several price hikes to offset rising costs.

In the last 5-6 years, several new players have entered this market, including Pidilite with Haisha Paints, Grasim with its Birla Opus, and JSW Paints, thereby increasing competitive intensity in the sector.

Syngle said competition has intensified across all categories, from economy products to premium and luxury paints, and is no longer limited to one or two players.

"The competitive environment continues not only from one player or two players, but across all players. My estimate is that the competitive intensity will continue to remain as we go ahead," he said.

According to Syngle, the economy segment remains particularly competitive as companies use higher discounts to attract contractors and dealers, though the intensity gap between economy and premium segments is not significant.

Asian Paints, Berger Paints, and Kansai Nerolac are the major players in the Indian paint industry, which, according to reports, controls over three-fourths of the market.