Why Paint Sector Stocks Falling? Detailed Analysis Here

The paints and coatings industry in India is diverse, serving architectural and industrial needs, focusing on aesthetics, protection, and sustainability. The industry is projected to grow from H62,000 crores to H1 lakh crore in the next five years.

In the fiscal year 2022-23, the paints and coatings industry benefited from lower raw material prices. In the first quarter of the current fiscal year, we’ll analyze the performance of paint companies and discuss rising competition.

Stock Price Movements:

– Berger Paints India Limited showed an 8% return.

– Akzo Nobel India Limited performed well with a 33-34% return.

– Asian Paints Limited and Kansai Nerolac Paints Limited had single-digit YoY revenue growth.

– Berger Paints had a 10% revenue increase, and Asian Paints achieved 29% YoY growth.

Indigo Paints saw an 11% QoQ decline, likely due to a focus on interior paints.

Asian Paints led in OPM% (Operating Profit Margin), showing strong margin performance.

Revenue Operations:

• All companies experienced revenue growth in the last quarter, indicating post-COVID recovery.

EBITDA Margin:

• Due to lockdown, raw material costs increased, impacting margins. Companies are now recovering.

Competition:

• Competition is intensifying in the industry.

Grasim Industries:

– Aditya Birla Group plans to launch its paints business under ‘Birla Opus.’

– Grasim had committed Rs. 10,000 crore for the paint business, with Rs. 3,640 crore spent by June 30, 2023.

– The aim is to become a strong number two player in India’s Decorative Paints Industry.

JSW Paints:

– In its fourth year of operations, JSW Paints earned close to Rs. 1,500 crore in revenue last year.

– This year, it targets Rs. 2,500 crore in revenue and aims to reach Rs. 10,000 crore by 2026 to be among India’s top three paint companies.

– 75-80% of revenue will come from decorative paints, while 20-25% will come from industrial coatings.

– JSW Paints has advanced manufacturing facilities in Karnataka and Maharashtra.

In conclusion, the paints and coatings industry in India is on the cusp of significant growth, with diverse product offerings catering to both architectural and industrial sectors. Despite recent challenges, such as fluctuations in raw material prices and the impact of COVID-19, the industry has shown resilience and adaptability.