Overview of Indian paints & coating industry

06 March 2023

After a hiatus of two COVID marred years, 2022 marked a turnaround for the Indian paint & coating industry. Vibrant growth in the construction and automotive segments led to a significant increase in demand for paint & coating products during the year. Volumes for all of the paints producers soared to new highs. Here, PPCJ presents an overview of country’s paints & coating industry

The Indian paint & coating industry, roughly valued at US$8bn, has registered mixed growth during the last few years. After being affected by COVID disruption in 2020 and the first half of 2021, the industry started to gain momentum during the second half of 2021. In contrast, 2022 has proved to be a year of steady growth for the industry.

The Architectural segment accounts for nearly 69% of the paint consumption in the country on volume basis, while the industrial segment accounts for the remaining 31% of the paints & coatings produced in the country. The share of architectural segment has declined from 73% to 69% over the last five years, indicating that the consumption of industrial sub-segments such as automotive has risen, which is a positive sign for the future growth of the overall paints & coating industry in the country.

The Indian Paint Association has forecast that India’s paint & coating industry will surpass INR1000bn (US$12.34bn) during the next five years from the current level of INR620bn (US$7.70bn). This is in line with the consistent double-digit Compound Annual Growth Rate that the sector has achieved over the last few years (barring 2020 and 2021).

“There is a strong positive correlation between the growth of the industry and GDP growth of the country given the sector’s dependence on overall economic activity, including income levels, industrial production, infrastructure and construction spending. Given India’s strong economic fundamentals, future growth potential and the newfound zeal for ‘Make in India’ the Indian Paint Industry is poised for a colourful future,” according to Ashok Kumar Gupta – President, Indian Paint Association.

The entry of some large scale paint producers (JSW Paints) and scaling of operations by some existing mid-scale producers (Indigo Paints and Shalimar Paints) have led to stiff competition in Indian paint & coating industry during the past two years. A number of units in the unorganised sector have also modernised their operations, which is expected to elevate a number of these producers into the mid-segment category in the coming years.


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Architectural segment continues to dominate the Indian paint & coating market

Spurred by the massive construction boom, the architectural segment will dominate the Indian paint & coating industry for the foreseeable future. The Indian construction market is one of the largest in the world, valued at US$609.6bn in 2021, with leading data analytics company Global Data foreseeing a projected CAGR growth rate of more than 6% from 2023-2026 in the Indian construction sector.

Consisting of industrial construction, residential construction, commercial construction, infrastructural construction, institutional construction and energy and utilities construction, the market is largely spurred on by real estate and infrastructural projects.

Vibrant growth expected from automotive segment

Steady growth in automotive production in India over the last decade has led to brisk growth in automotive paint consumption in the country. The country is expected to play a key role in the global automotive industry in the medium and long term. These factors will push automotive coatings demand to new highs in the country in coming years. Alongside  volume, there has been a significant uptick in the value of coating products in the Indian automotive industry, on account of growing ‘premiumisation’ in the car segment in the country.

Table- Automotive production trends in India during the last five financial years
Category 2017-18 2018-19 2019-20 2020-21 2021-22
Passenger Vehicles 4,020,267 4,028,471 3,424,564 3,062,280 3,650,698
Commercial Vehicles 895,448 1,112,405 756,725 624,939 805,527
Three Wheelers 1,022,181 1,268,833 1,132,982 614,613 758,088
Two Wheelers 23,154,838 24,499,777 21,032,927 18,349,941 17,714,856
Quadricycles 1,713 5,388 6,095 3,836 4,061
Total 29,094,447 30,914,874 26,353,293 22,655,609 22,933,230
Data source- Society of Indian Automobile Manufacturers


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Paint majors expecting robust demand

Indian paint & coating producers are expecting to register steady growth in volume and profits in the short and medium term.

Asian Paints, India’s largest paint & coating producer, registered a volume growth of 13% during the April- December 2022 period. However, during the same period the company registered a value growth of 23%, indicating that the Indian industry is graduating towards higher value products.

Amit Syngle, MD and CEO of Asian Paints, commenting on the company’s financial results for the period April- December 2022, said: “The nine monthly results also gives us a peep in terms of how the overall year has been to that extent, and we look at a clear double digit 13% volume growth and a 23% value growth which is coming in, in terms of the overall decorative business. The CAGR numbers are very strong at volume at 18 and a value of 19.2. So clearly the nine monthly figures are very, very strong from the point of view of the overall growth of the business.”

Berger Paints, India’s second largest paint company is expecting a robust growth in paints & coating consumption in the country during the next four-five years, expecting to double its sales revenue to INR200bn. In the ongoing financial year ending on March 31, 2023, the company is expecting to register sales revenue of INR100bn.

“Most of the growth would come from the domestic market. With the easing of raw material prices, the margins will improve gradually. Q4FY23 ( January- March 2023) would be better than Q3FY23 and Q1FY24 ( April- June 2023) would be better than Q4FY23,” according to  Abhijit Roy, Managing Director and Chief Executive Officer, Berger Paints.

Anuj Jain, Managing Director of Kansai Nerolac says, “During July- September 2022, we recorded topline growth of 19.3%. The topline growth is led by passenger vehicle; decorative growth is double-digit in terms of value and volume is flat; raw material prices are gradually cooling off, but at year-to-date level, the inflation continues and it is about 7% to 8%. So far, we have taken approximately 3% price increase. We have continued to increase our market share in automotive.”

By Yogender Malik, Correspondent for PPCJ


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