JSW Paints, Berger Paints ramp up expansion, reach amid heightened competition and sluggish demand

Decorative paint companies in India are currently battling challenges on two front. On the one hand, sales have been slow for some time and on the other, they face a new deep-pocketed competitor, who is aggressively expanding to grow its market share. Amid this, the sector has already seen some consolidation with JSW Paints snapping up Akzo Nobel India.

In this backdrop, the incumbents are going all out to protect their turf, whether it is through expanding its distribution and reach, launching new products and building up capacity.

Berger Paints, the second largest paints maker in the country, is focusing on expanding its operations in key southern and western states. Karnataka, Telangana, parts of Andhra Pradesh, Tamil Nadu, Maharashtra, Madhya Pradesh and Rajasthan are states where it sees gaps that can be filled up.

“Distribution expansion is one big area of opportunity for us. Our products are well known, but we need to improve distribution and need to make our products available,” pointed Abhijit Roy, the MD and CEO of Berger Paints.

The company has also launched a new product, Kolorplus, in the premium emulsion category in the south and is now scaling that up elsewhere.

Berger’s deeper push comes at a time Aditya Birla Group-owned Grasim, which entered the already competitive market with Birla Opus in 2024, is aggressively ramping up its presence. It has rapidly expanded its production as well as distribution. The company has commenced trial production of water-based paints and emulsions at its sixth plant in Kharagpur and is on track for a commercial launch by the end of the September quarter. This would give it an installed capacity of 1,332 million litres per annum, reaching 24 per cent of the organised paints industry.

Birla Opus has also expanded its distribution network to over 8,000 towns. Till June 2025, Birla Opus has incurred a capex of around Rs 9,555 crore. The company has also offered discounts and promotions to give its distribution and sales a boost, helping it gain a market share of over 5 per cent in little over a year, according to industry executives.

Roy admitted that competitive intensity had gone up, but remained confident of maintaining its market share. The company has a share of close to 21 per cent among all the listed paint players, he noted.

Berger is already well on the way towards expanding its capacity with two new plants one in Panagarh in Odisha and the other one in Odisha, while also expanding its facility in Hindupur, Andhra Pradesh. The company had already earmarked investment of around Rs 2,000 crore in this expansion.

According to Roy, the company is on track to achieve a revenue of Rs 20,000 crore by 2030 and remain a clear number two player in the industry. In the year ended March 2025, Berger had reported a revenue of Rs 11,545 crore.

Much of this growth will be come through organic expansion. Will Berger also explore acquisition opportunities to scale up its business?

According to Roy, major acquisition possibilities in the paints industry are remote, given the size and scale of the players now. However, the company may be open to explore if any smaller opportunities were to arise at right valuations.

Amid the heightened competitive intensity, JSW Paints recently signed a deal to acquire up to 74.76 per cent stake in Akzo Nobel India for up to Rs 8,986 crore.

Kansai Nerolac, JSW plus Akzo Nobel and Birla Opus vie for 3rd spot

Roy stated that three players – Kansai Nerolac, JSW plus Akzo Nobel and Birla Opus – would battle it out for the third spot, but it was unlikely the top two players – Asian Paints and Berger – would be unseated from their respective positions as most companies would continue to grow at a similar pace and therefore any possibility of a catch up was unlikely anytime soon.

Asian Paints remains the market leader in paints but has seen its market decline to around 52 per cent from close to 59 per cent, in the previous financial year, according to analysts, suggesting, it has been hit the most from the entry of Birla Opus.

“The competition is intense, and it is driving us to look at doing more of innovation, seeing how we can look at propelling the brand further, increasing the saliency, looking at prepositions which are new,” said Amit Syngle, the MD and CEO of Asian Paints after the company’s first quarter earnings.

 

The company is also constantly scaling up its distribution reach, which is now touching around 1.7 lakh outlets, while also launching new products. According to Syngle, new products contributed to around 14 per cent to the overall revenue last quarter.

Amid the competitive intensity, companies have ramped up their sales and marketing expenses. However, the going has been tough for most paint companies, not just because of the competition, but also due to slow demand, especially in urban areas. Housing sales have also been slowing across major market, which affects allied areas like paints.

Asian Paints’ standalone net sales declined 1.2 per cent in the April-June quarter. Berger’s standalone revenue was also up only 2 per cent.

Analysts are not too optimistic about the paint sector growth and expect another year of sluggish growth. Credit Ratings agency CRISIL expects paint sector volumes to rise 4-5 per cent in the current financial year ending March 2026, compared with 8-9 per cent volume growth in 2024-25. Overall revenue growth is also likely to be flat this year as downtrading, aggressive competition from the new entrant and JSW’s acquisition of Akzo Nobel, will keep realisations under pressure.

Operating margins, which declined 300 basis points in the last financial year, are likely to further fall 100 bps to around 15.5 per cent, estimated CRISIL.

“Competitive realignment will intensify as incumbents defend share, new entrants expand, and the recent acquisition by a significant manufacturer reshapes the market. This will keep pricing power weak, and marketing spends elevated,” said Poonam Upadhyay, director at CRISIL.

Monsoon season typically hurts paints business as demand, especially for exterior painting takes a backseat. Roy pointed that heavy rains across the country have impacted the company’s sales this quarter. However, with Diwali in October this year, Roy expects September will be a big month for the paints industry with a pre-Diwali demand pickup, but if the rains subside.

As such, the second half of this year is expected to be better than the first half, with mid-single-digit sales growth likely, according to Roy.

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