Paint makers bet on strong markets, not big discounts, as competition intensifies

India’s third-largest paintmaker, Kansai Nerolac, is strengthening its presence in markets where it already commands scale, while smaller rival Nippon Paint is leveraging its dominance in South India.

Kansai’s managing director, Pravin Chaudhari, during a post-earnings interaction with analysts in October, said that they face ‘heavy competition’ in the decorative paints segment.

“We will be making calculated investments in our strong markets and also improving our product mix and not getting into products which are actually low or almost zero profits. So that's a clear strategy," Chaudhari said.

Nippon Paints India has adopted a similar approach, and is also exploring expansion beyond decorative paints into sealants, powder coatings and other adjacencies.

“In decorative paints, we are doubling down on the Southern market, where our brand recall and distribution are strongest," said Sharad Malhotra, the newly-appointed CEO of Nippon Paints India.

He added, “For us, the battlefield is no longer limited to paint. We’re looking to expand into adjacencies such as sealants, films and other categories as these offer strong growth potential, while being adjacent spaces to paints. At the same time, expanding significantly into other geographic areas remains high on our agenda."

Market leader Asian Paints’ MD, Amit Syngle, told analysts this month that the company will continue to focus on its core strengths, which include tailoring products to meet the specific needs of different regions.

Analysts feel that regional economics may be vital for companies. “For several companies, this is turning into an existential challenge. In the case of Southern India, Asian Paints may have taken a hit due to competition, but it was never in danger of being pushed out. But for players like Nippon, where a large share of revenue comes from Tamil Nadu alone, the impact can be disproportionately high," said Manoj Menon, head of research at ICICI Securities.

Elara Securities senior vice president Amit Purohit echoed similar sentiments.

“They (paint companies ) are focusing on markets where they already have an advantage because for them, competing meaningfully outside their stronghold remains a challenge," said Purohit.

Springing back

Shalimar Paints, one of the country’s oldest manufacturers, is attempting a comeback after nearly a decade of losses. The brand expects to become Ebitda positive by the end of this fiscal and return to net profit in FY27, Kuldip Raina, MD and CEO, told Mint.

At the heart of Shalimar’s turnaround plan is avoiding direct competition with larger players in metro and tier I markets, where aggressive discounting influences customer decisions. Instead, the company is deepening its presence in tier II, tier III and tier IV towns, which are significantly underpenetrated and offer runway for growth, Raina said.

Analysts believe the pecking order is Asian Paints, Berger Paints, Kansai Nerolac, JSW Paints (including Akzo Nobel), Indigo Paints and Birla Opus. The remaining 4-5% is shared by smaller players such as Nippon, and Shalimar Paints.

At least one analyst agrees that the strategy of giving discounts is not sustainable. “Given the capital-intensive nature of the sector, the current penetration-led pricing strategy is not sustainable and is expected to weigh on the earnings growth trajectory. Consequently, we foresee competitive pressures easing only by FY27–28, as Birla Opus begins to scale back its rebate offerings," said Antu Eapen Thomas, research analyst at Geojit Investments Ltd.

Some analysts believe that the survival instinct is kicking in for paintmakers.

Focusing on their stronger markets for many of them is a matter of survival, ICICI Sec’s Menon said, adding, when they say they’re getting aggressive, “it’s because they don’t really have a choice."

Elara Securities senior vice president Amit Purohit echoed similar sentiments on these strategies.

“These are sensible strategies to protect their market share, but also forced ones as no smaller player today can claim they’ll take on market leaders in the major urban markets," said Purohit.

Surviving competition

According to ICICI Sec’s Menon, in the end the smaller companies will eventually give up ultimately depending on how much loss they can absorb and for mid sized companies competing directly in emulsions and enamels, consolidation is inevitable. “Some may not survive, others may end up selling out," he said.

The competitive landscape has shifted dramatically since the entry of Birla Opus in 2024 and JSW Paints’ acquisition of Akzo Nobel India’s paint business in 2025. Both are aggressively chasing scale, and Opus is targeting the No. 2 position, while JSW is aiming for No. 3, challenging long-established players and unsettling industry dynamics.

ICICI Sec’s Menon pointed out that It’s reasonable to expect Birla Opus to double down due to competition. “They aren’t going anywhere and they’re backed by a large conglomerate with deep pockets. Competition will stay intense, but if industry growth improves, it won’t be as disruptive," he said. Elara’s Purohit also agreed. “Some believe competition will ease but I see that competition is unlikely to be over so soon as new entrants will continue to focus on market share," he said.

These strategies are in contrast to larger paintmakers like Berger Paints, which has said it is prepared to choose market share over margins if required, and separately, JSW Paint’s MD Parth Jindal had said, after the Akzo Nobel acquisition in July, that they will fight back with everything they have in the decorative segment to compete with rivals.

Analysts, despite the turbulence, expect a cyclical recovery. Paint industry revenues are likely to rebound this financial year, after two years of muted growth, according to an ICICI Securities report on 30 June. The note highlights a two-decade pattern: the sector typically bounces back strongly after consecutive slow years. Geojit’s Thomas expects a degree of volume recovery to happen in H2FY26.