Introduction

 The Indian paint industry is over 100 years old. Its beginning can be traced back to the
setting up of a factory by Shalimar Paints in Calcutta (now Kolkata) in 1902. Until World War
II, the industry consisted of small producers and two foreign companies.
 The domestic paint industry is estimated to be a Rs 500 billion industry with the
decorative paint category constituting almost 75% of this market. The decorative paint
market includes multiple categories depending on the nature of the surface like exterior wall
paints, interior wall paints, wood finishes, enamels as well as ancillary products like primers,
putties, etc.
 The industrial paint category constitutes the balance 25% of the paint market and
includes a broad array of segments like automotive coatings, marine coatings, packaging
coatings, powder coatings, protective coatings and other general industrial coatings.
 The paints sector is raw material intensive, with over 300 raw materials (50% petro-
based derivatives) involved in the manufacturing process. Since most of the raw materials
are petroleum based, the industry benefits from softening crude prices.
 Under the make in India initiative, the government of India aims to increase the share of
the manufacturing sector to the gross domestic product (GDP) to 25% buy 2022 from existing
16%.
 Manufacturing sector has the potential to reach US$ 1 trillion by 2025 and India is
expected to rank amongst the three growth economies and manufacturing destinations of
the world by 2020. These factors expected to significantly boost industrial paint
consumption.
Paint Industry in India

 The Indian paint industry is worth around Rs. 50,000 Cr.

 Till 2016, organised paint companies in India had a market share of only 65%.
The unorganised paint companies was holding the rest 35% market share.
 After GST application the paint industry too got streamlined and the organised players
benefited from it. Now, the organised paint companies in India make up for the 80% market share
and the rest 20% market share is distributed among the unorganised players.
 Asian Paints has the biggest market share in the industry if 41%-42%. The next company is
Berger Paints with a market share of 13%-14%. Kansai Nerolac Paints too has a market share of
around 13%-14%. Akzo Nobel India has a market share of 9%-10%.
 These are the 4 biggest paint companies in India. There are also some other listed paint
companies in India such as Shalimar Paints.
 The overall Paint Industry in India has seen a correction of 15%-20%.

Key Drivers
  The Indian paint industry has been witnessing a gradual shift in the preferences of people
from the traditional whitewash to high-quality paints like emulsions and enamel paints,
which is providing the basic stability for growth of Indian paint industry.
 Rise in disposable income of the average middle class coupled with increasing investment on
education; urbanization; development of the rural market; and various launches of many
innovative products, like friendly, odour free, and dust & water-resistant paints, are major
drivers that are propelling the growth of the paint market in India.

Porter 5 Forces

 Supply => Supply exceeds demand in both the decorative as well as the industrial paints
segments. Industry is fragmented.
 Demand => Demand for decorative paints depends on the housing sector and good
monsoons. Industrial paint demand is linked to user industries like auto, engineering and
consumer durables.
 Barriers to entry => Brand, distribution network, working capital efficiency and technology
play a crucial role.
 Bargaining power of suppliers => Price increase constrained with the presence of the
unorganised sector for the decorative segment. Sophisticated buyers of industrial paints also
limit the bargaining power of suppliers. It is therefore that margins are better in the decorative
segment.
 Bargaining power of customers => High due to availability of wide choice.
 Competition => In both categories, companies in the organised sector focus on brand
building. Higher pricing through product differentiation is also followed as a competitive
strategy.
Segments

Decorative Paints Market

(a) Application - Residential, Commercial
(b) Application Area - Interior Paints, Exterior Paints

(c) Product Class - Premium Paint, Mid-Tier Paint, Economy Paints

(d)Technology - Water Based, Solvent Based

(e) Composition
(f) Demand - Replacement Demand, New Demand
(g) Players
(f) Region
(h) Tier Cities
(i) Emulsion Paints Market Outlook in Decorative Paints – Value, Volume, Types, Region, Tier Cities
(j) Enamel Paints Market Outlook in Decorative Paints – Value, Volume, Types, Region, Tier Cities
(k) Distemper Paints Market Outlook in Decorative Paints - Value, Volume, Types, Region, Tier Cities

Industrial Paints Market

Segment - Automotive Coating, High-Performance Coating, Powder Coating, Coil Coating, Marine
Raw Materials for Paint Market
Binders, Pigments, Solvents, Additives

Top Players

The domestic paint industry is estimated to be a Rs 50,000 Crores industry with the decorative

paint category constituting almost 75% of this market.

The decorative paint market includes multiple categories depending on the nature of the surface
like exterior wall paints, interior wall paints, wood finishes, enamels as well as ancillary products
like primers, putties, etc.

The industrial paint category constitutes the balance 25% of the paint market and includes a broad
array of segments like automotive coatings, marine coatings, packaging coatings, powder coatings,
protective coatings, and other general industrial coatings.

The domestic paint industry still continues to have a sizeable 30-35% share of unorganized players.

List of top Paint companies in India which is sorted out based on the total Sales.

1. Asian Paints Ltd

Founded in 1942, Asian Paints is India’s leading and Asia’s third largest paint company, with a
turnover of Rs 193.50 billion. Over the course of 25 years, Asian Paints became a corporate force
and India’s leading paints company. Asian Paints manufactures a wide range of paints for
decorative and industrial use. The Company operates in 15 countries and has 26 paint
manufacturing facilities in the world, servicing consumers in over 60 countries.

2. Berger Paints India Ltd

Berger Paints India is headquartered at Kolkata, with 16 strategically located manufacturing units

across India (including the subsidiaries), 2 in Nepal, 1 each in Poland and Russia and about 162 stock
points. The company also has an international presence in 4 countries (Nepal, Bangladesh, Poland,
and Russia).

Berger Paints India Limited is the second largest paint company in the country with a consistent
track record of being one of the fastest growing paint companies.

Starting out as Hadfield’s (India) Limited, in 1947 it was acquired by British Paints (Holdings)
Limited, UK and came to be known as British Paints (India) Limited. In 1983, the name of the
Company was changed to Berger Paints India Limited.

3. Kansai Nerolac Paints Ltd

Kansai Nerolac is the second largest coating company in India and a market leader in Industrial
Coatings. GNPL signed a TAA with Kansai Paints Co. Ltd., of Japan in Osaka in 1986 for the
manufacture of Cathodic Electrodeposition Primer and other sophisticated coatings for the
automotive products. GNPL was the first company to introduce this technology in India.

4. Akzo Nobel India Ltd

AkzoNobel India present in India for over 60 years. It is one of the leading paints and coatings
company. The company has 5 operating sites in India. AkzoNobel NV acquired Imperial Chemical
Industries Ltd., 

In 2012, 3 other AkzoNobel Group companies operating in India were merged under the umbrella of
AkzoNobel India Limited, to make it the only integrated Paints and Coatings company in India with
presence in all segments of the Paints & Coatings space, with a relative small Chemicals’ portfolio.

5. Nippon Paint (India) Private Limited

Nippon Paint is based in Japan and has over 138 years of experience in the paint industry. The
number one paint manufacturer in Asia, and among the leading paint manufacturers of the world.

Nippon Paint is the only paint solutions provider for all kinds of surfaces (Auto, Marine, Protective,
Decorative and Industrial Paints).

6. Shalimar Paints Ltd

The Shalimar Paint Color & Varnish Company was established in 1902 in Howrah. Shalimar
Paints set up South-East Asia’s first ever large-scale manufacturing plant in 1902 in Howrah, West
Bengal.

With access to high-end technology in the industrial coatings segment, Shalimar Paints pioneered
aviation coatings, marine paints and the painting of thermal power plants.

Financials

 The first half of FY2018-19 was impacted by supply chain disturbances due to the GST
rate reduction from 28% to 18% leading to a bit of de-stocking in the distribution channel.
The longer festival season ensured that there was good growth in the paint industry in the
September-October period.
 The paint industry experienced significant raw material price inflation during the year
with rising crude prices and depreciating currency and this led to a few rounds of price
increases by the industry players to shore up margins.
 The Indian paint industry has been witnessing a gradual shift in the preferences of people
from the traditional whitewash to high quality paints like emulsions and enamel paints,
which is providing the basic stability for growth of Indian paint industry. Besides, it is creating
 a strong competitive market, where players are utilizing different strategies to tap the
growing demand in the market for a larger share.

Growth Prospects
 In FY19, the paint industry has expanded at the rate of 12% in volume terms and about
15% in value terms. Going forward, the growth shall be dependent on a number of factors
like disposable income in the hands of public, urbanisation, economic development, regular
monsoons, raw material prices, growth in the infrastructure and recovery in the real estate &
automobile segment.
 The market for India paints and coatings is expected to expand at a CAGR of 8.56% during
the forecast period of 2019 – 2024. Growing demand from the construction industry,
coupled with rising infrastructure activities, is driving the demand for the market studied.
 Government’s focus on infrastructure development would support the industrial coatings
demand. The volatility affecting critical raw materials including crude oil as well as volatility
on the exchange rates will need to be critically monitored to cushion the impact on
profitability.
 Huge domestic market with a rapidly increasing middle class and overall population. By
2030, Indian middle class is expected to have the second largest share in global consumption
at 17%.
 The Indian paints and coating industry are expected to grow steadily in the short and
medium term on the back of strong growth in Indian economy. India’s young population
represents a huge opportunity as more young Indians join the workforce and will have
disposable income available.
 Decorative paints segment is expected to witness higher growth going forward. The fiscal
incentives given by the government to the housing sector have immensely benefited the
housing sector. This will benefit key players in the long term.

Summary

 Automobile industry and other similar industries which are heavily dependent upon crude
oil come up with alternative energy resources, then demand for crude oil might go down.
 The paints sector is raw material intensive, with over 300 raw materials (50% petro-based
derivatives) involved in the manufacturing process. Since most of the raw materials are petroleum
based, the industry benefits from softening crude prices.
 And when the demand for crude oil goes down, that time paint industry will benefit from
this as the crude oil prices will go down and the input costs of the companies will also go down
and the margins will improve.
 All the companies of Paint Industry in India have premium PE values which are well above
their historical PE values and will remain the same way for some more time in the future.