India's leading paint manufacturing companies are adopting a guardedly positive stance for the ongoing December quarter, anticipating a rebound in sales volumes and profitability. This follows a challenging first half of the fiscal year, which was severely disrupted by prolonged monsoon rains. However, executives acknowledge that fierce competition in the sector continues to pose significant challenges.
Green Shoots Emerge After Monsoon Disruption
Senior management from top firms including Asian Paints, Kansai Nerolac, Berger Paints, and AkzoNobel India have indicated that recent market trends suggest a revival in demand starting from September. This turnaround is expected to be supported by favourable raw material costs and positive seasonal factors throughout the remainder of the quarter.
The September quarter (Q2 FY26) witnessed notably muted growth for the industry, primarily attributed to an extended monsoon period and a condensed festive calendar. Amit Syngle, Managing Director and CEO of Asian Paints, revealed that overall industry growth during Q2 was a modest 3.5–4 per cent. He identified the monsoon as the key spoilsport, compounded by a shorter festive window.
Syngle noted, however, that the company began observing initial signs of recovery or "green shoots" in September and October. A robust marriage season, beneficial monsoon outcomes, and potential corrections in Goods and Services Tax (GST) are expected to further bolster demand moving forward. Despite these positive indicators, he advised a conservative approach in evaluating the near-term business environment. Asian Paints recorded a 6.38 per cent increase in sales, reaching Rs 8,513.70 crore, in the September quarter.
Echoing this sentiment, Kansai Nerolac Paints reported continued rain-related disruptions in Q2 but confirmed that demand started improving towards the end of September. The company's Managing Director, Pravin Chaudhari, stated that consumption demand is projected to "pick up steadily in the second half of the fiscal year". He expressed optimism for an uplift in November and December, adding that "quarter 4 should be far better" for both decorative and industrial paint segments.
Abhijit Roy, MD and CEO of Berger Paints India, similarly forecasts stronger demand in November and December, driven by pent-up consumption. Berger's Q2 revenue saw a 1.9 per cent rise to Rs 2,827.49 crore, although its profit declined by 23.5 per cent to Rs 206.4 crore.
Margin Recovery Amid Unabated Competition
Companies are optimistic about margin improvement in the coming months, aided by softer prices for key raw materials. Berger Paints, for instance, expects a near-term enhancement in gross margins due to these benign input costs and an improved product mix.
Concurrently, the competitive landscape remains a primary concern for the industry. Amit Syngle emphasized that competition is here to stay, with all market players aggressively pushing their strategic initiatives. Kansai Nerolac's Chaudhari highlighted facing "very heavy competition" in the decorative paints segment. The company is responding with a calculated strategy focused on protecting its core markets while steering clear of low or near-zero margin products. Kansai Nerolac posted an 11.3 per cent rise in consolidated profit to Rs 133.31 crore in Q2, even as its revenue remained nearly flat at Rs 1,954.18 crore.
Rajiv Rajgopal, Chairman and Managing Director of AkzoNobel India, pointed out that the sector has experienced cumulative price corrections of approximately 1.5–2 per cent. This is a direct result of aggressive discounting following the entry of new players. Nevertheless, he anticipates the next quarter will deliver double-digit volume growth and high single-digit revenue growth.
The Evolving Market Landscape
The Indian paint market, where Asian Paints, Berger Paints, and Kansai Nerolac collectively command over three-fourths of the share, is undergoing a significant transformation. The competitive intensity has been ratcheted up in recent years by the arrival of well-funded new entrants. These include Pidilite-backed Haisha Paints, Grasim's Birla Opus, and JSW Paints. Their aggressive market strategies have sustained pricing pressure across the industry, even as the early signals of a demand recovery begin to surface.
In summary, while the paint industry braces for a more promising December quarter fueled by seasonal demand and cost benefits, navigating the intense rivalry from both established players and ambitious newcomers will be crucial for maintaining growth and profitability.
