HSBC’s Amit Sachdeva suggests the Paint Sector is Unlikely to Participate In Price Wars

After the entry of Birla Group into the paint industry through Birla Opus, many experts said this might trigger a price war and huge competition in the paint market. Currently, Asian paints control around 50% of the market share in the paint industry, contrary to experts. HSBC’s Head of India Equity Strategy, Amit Sachdeva, told CNBC in a discussion that the price war in the paint industry is unlikely to happen.

Though after the announcement of Birla Opus, the stocks of the paint industry in the stock market saw a downfall, around seven stocks of the paint industry saw a hit in their market capitalization, and from February to March, Asian paint saw around a 7% downfall in its market price, and the same goes for Berger paints.

As per sources, Birla Opus will place their products valued at nearly 5% lower than existing placers, which might disturb the existing players a bit, but Grasim will not be able to disrupt the market that well with the current scenarios, Amit added.

 Hemant Jalan, CMD of Pune-based Indigo Paints, also said in an interview with CNBC that the paint is selected by the painter or contractor instead of the customer who wants to use it, which makes this industry strange and difficult to understand. The companies use different strategies to attract painters and contractors instead of customers; the customers usually choose colour for their walls, and the rest is usually chosen by painters.