PALETTE OF PROBLEMS

As India's paint wars intensify, legal, compliance, and competitive hurdles mount. Can manufacturers scale up without smudging the rulebook?

- ASHISH SINHA

IT’S BEEN ayear of splashy colour wars and margin wipe-outs in India’s once predictable paint industry. What was long seen as a safe, defensive sector—riding on urbanisation, rising disposable incomes, and the constant human need to beautify walls—has found itself in the middle of a not-so-pretty transformation. FY25 saw the market shaken up, not stirred, as new challengers muscled in and profit margins got squeezed like a half-empty paint tube. India’s decorative paint market is pegged at Rs 70,000-72,000 crore, growing 10 per cent annually.

As we file this report, news reports indicate that JSW Paints may soon acquire Akzo Nobel India stake for $1.1 billion. Once done, experts say JSW Paints is expected to emerge as amajor player in both decorative and industrial paint segments.

Let's start with the elephant-sized splash in the room—Grasim’s entry with its Birla Opus brand. When a deep-pocketed conglomerate enters your turf with a billion-dollar war chest and a national rollout in months, you pay attention. And that's precisely what the incumbents had to do. Asian Paints, the undisputed leader with a decades-long run atthe top, saw its market share reportedly slip below the 52 per cent mark from 59 per cent just a year ago. Grasim didn’t just enter; it barged in with aggressive pricing, juicy dealer incentives, and a ready-to-paint distribution network.

And that leads us to the heart of the matter: margins. With crude-linked input costs inching up and new players forcing price cuts, the fat 18 per cent operating margins that paint companies once took for granted are now shrinking, landing closer to 16 per cent, and may dip further. Volume growth? That's still kicking around the 10 per cent mark. But top-line growth? That's where the hues start fading—dropping to a muted 4 per cent in FY25, a pale shade compared to the vibrant 14-15 per cent growth seen between FY19 and FY23.