The Indian paint industry is the world’s fastest-growing major paint economy, with steady double-digit growth over the past two decades. Its current value is over INR 62,000 crores (USD 8 billion). Over the past decade, Growth in the paints industry has been studied under keen observation that highly depends upon the standards of construction, automobiles and GDP from FY11 to FY20. The paints industry’s net sales have increased on average by 12.4% annually. In contrast, automobile production increased by 5.1% and construction GVA increased by 4.8%. In the same time frame, the GDP at constant prices increased by 6.7%. Read More Business News on our website.
Paint Industry News 2023
Here are the top headlines in Paint Industry India. You can read about the growth, stats and other related information about different Indian paint Industry brands.
Asian Paints Limited
The consolidated revenue increased by 1.28% year-over-year to Rs 8,636.74 crore. The consolidated revenue for the previous year was Rs 8,527.24 crore. The revenue falls short of the Street’s estimate of Rs 9,456 crore (a 10.9% increase was anticipated). From Rs 1,468.18 crore the previous year, PBDIT (profit before depreciation, interest, tax, other income, and exceptional items) increased by 1.8% to Rs 1,494.76 crore. From Rs 1367.42 crore, the profit before special items and taxes rises by 5.5 percent to Rs 1,442.98 crore. On a consolidated basis, the net profit increased by 6.37 percent to Rs 1,097.06 crore. The consolidated net profit for the same quarter last year was Rs 1,031.29 crore. The analyst’s estimate of Rs 1,104 crore for the net profit is comparatively less.
EBITDA margin increased by 400 basis points on a QoQ basis because of the raw material deflation. Q3FY23 witnessed a poor product mix led by the Economy & Waterproofing range, with Down trading seen in certain premium range products. Luxury Emulsions performed relatively better.
Berger Paints India Limited
The quarter’s consolidated revenue from operations was Rs 2,693.59 crores, a 5.60 percent increase from the previous year’s corresponding quarter (Rs 2,550.77 crores). The standalone revenue from operations for the quarter was Rs 2,418.91 crores, which represents a growth of 7.21% compared to the corresponding quarter of the last year (Rs 2,256.24 crores). The quarter’s net profit (after deducting the share of associate and joint venture profits and losses) was Rs 201.17 crores, a decrease of 20.48 percent when compared to the same period last year (Rs 252.97 crores).
Demand in Decorative was impacted on account of early Diwali, extended monsoons and higher. Than normal channel stocking due to price increases during Oct 21 & Nov 21. Raw material prices showed a decline during the quarter. The company was able to conclude the price increases with all its key OEMs during the quarter which will help partly offset the high inflation witnessed over the last two years. EBITDA margin declined by 100 basis points on a YoY basis due to the change in product mix and high-priced inventory.
Kansai Nerolac Paints Limited
Despite a 1.4% increase in net revenue from operations to Rs 1,717.1 crore in Q3 FY23 compared to Q3 FY22, Kansai Nerolac Paints reported a 15.2% decline in net profit to Rs 112.3 crore. The EBIDTA for the third quarter of FY23 was Rs 188.5 crores, a 10.2% decrease from the previous quarter. In the third quarter of the previous year, other operating incomes included exceptional income of Rs 44.8 crore. Net revenue is up 4.1%, EBITDA is up 14.1%, and PAT is up 13.5% excluding this.
Akzo Nobel India Limited
With a 16% increase in consolidated net profit to Rs 97.4 crore and an 8% increase in revenue from operations to Rs 986.8 crore, Akzo Nobel India saw a 5.51 percent increase to Rs 2349.40. Earnings before interest and taxes (EBIT) increased by 12 percent year over year to Rs 121.8 crore in Q3 FY23, while profit before taxes (PBT) increased by 19% year over year to Rs 131.60 crore. In Q3 FY23, total expenditures increased by 7.3% year-over-year to Rs 843.90 crore. Employee expenses increased 19.5% to Rs 76.50 crore while the cost of raw materials consumed decreased by 7.6%.
Decorative business showed decent growth in the quarter in spite of extended monsoon, very high base effect and short festive season compared to the corresponding quarter last year. However, growth progressively improved with double-digit growth in December. The profitability during the quarter was impacted by lower sales of exterior paints due to prolonged monsoon and high-priced inventory sold during the quarter.
Indigo Paints Limited
On top of a 5.95 percent increase in net revenue from operations to Rs 281.27 crore in Q3 FY23 over Q3 FY22, Indigo Paints reported an 8.06 percent increase in net profit to Rs 26.26 crore. The quarter’s EBIDTA (excluding other income) was Rs 40.56 crore, up 4.86 percent from the previous year’s corresponding quarter’s Rs 38.68 crore.
The company operates only In the decorative paints segment, which is cyclical. Due to declining raw material prices, the Company has been more aggressive in offering trade Discounts; despite higher discounts, the Company has managed to maintain a healthy gross Margin level which continues to be the highest in the industry.
Headwinds and Tailwinds of Paint Sector
Headwinds:
The real estate market is closely related to the decorative paints market. The growth of the paint industry is somewhat impacted by obstacles in the real estate sector.
Sales of industrial paint are mostly linked to the poor performance of the automobile industry.
Volatility in crude oil prices and foreign exchange (forex) rates affects the prices of raw materials like titanium dioxide, crude oil derivatives, pigments, and resins, which account for 55-60% of total sales; which may influence margins.
The year’s pre-holiday painting activities were postponed due to prolonged monsoons and an earlier holiday season.
Tailwinds:
The majority of paint manufacturers operate in related downstream industries like adhesives, waterproofing, and so on. Paint manufacturers stand to benefit greatly from this huge growth opportunity due to the low penetration of these markets.
The need to décorate one’s home and the growing culture of working from home can also be powerful levers for the paint industry.
The real estate Industry is beginning to show signs of recovery. The decorative market will benefit greatly from this.
In the third and fourth quarters, profitability is likely to rise as solvent and monomer prices fall. Prices for titanium dioxide have also fallen toward the end of the second quarter.