Price war is hurting paint firms

Competition in India's paints sector is becoming cut-throat amid subdued demand.

- Harsha Jethmalani

To protect their market share, incumbents are enhancing brand visibility and distribution, hurting the sector's profitability.

The aggregate Ebitda margin of five key listed paint makers fell year-on-year for the fifth straight quarter in Q4FY25, showed IIFL Securities data. The reading declined 123 basis points (bps) year-on-year to 15.9%.

This means the benefit of benign input cost, which aided gross margin expansion, was offset by higher operating costs. Other expenses and staff costs in Q4 rose almost 110bps and 50bps year-on-year, respectively, according to IIFL.

Asian Paints Ltd's Ebitda margin eroded by 219 basis points year-on-year in Q4 on higher marketing expenses. Operating margins of Kansai Nerolac Paints Ltd and Akzo Nobel India Ltd also contracted.