MUMBAI: As the Iran war pushes up crude-linked input costs and squeezes margins, India’s paint makers are turning to industrial coatings for steadier growth as competition intensifies in decorative paints.
The shift reflects dual pressures: disruption in the core decorative segment following the entry of Birla Opus, and margin strain linked to supply-chain dislocations from the West Asia conflict, prompting companies to look beyond consumer-facing paints.
JSW Paints, which acquired AkzoNobel India in a deal valued at nearly ₹9,000 crore to become the country’s fourth-largest paint company, sees stronger growth potential in industrial coatings than in the decorative segment, Parth Jindal managing director of JSW Paints and chairman of JSW Dulux, the erstwhile AkzoNobel India, told Mint.
“We have global R&D capabilities after we acquired Akzo Nobel and particularly in the absence of Birla Opus in the industrial paints space we see less competition,” Jindal said. He added that a potential shift towards electric vehicles (EVs), driven by the West Asia conflict, could further boost demand.
The conflict has already started influencing the EV market. Since the war began at the end of February, crude oil prices have hit new records, and EV makers such as Vietnam’s VinFast and homegrown Ola Electric have offered discounts to wean consumers away from internal combustion engine vehicles. Analysts say the energy crisis could push fence-sitters towards EVs.
JSW Paints’ acquisition also gives it a stronger industrial paints platform. Under the deal, the Dutch parent will retain the powder coating business of AkzoNobel India and continue as the technology supplier for industrial paints.
Berger Paints, a larger peer, is weighing a similar shift. The company is particularly focused on opportunities arising from EV-driven demand.
“If the EV segment grows, we will focus more on that business and build on our existing presence. This also includes scaling up our industrial and coatings portfolio in that domain,” Abhijit Roy, CEO and managing director of Berger Paints India told Mint last week, pointing to opportunities arising from the West Asia conflict.
Berger serves diverse sectors including fans, construction equipment, lighting, and glass coatings, while its automotive portfolio spans two-wheelers, tractors, and commercial vehicles. Through strong partnerships with leading manufacturers, it reaches 75–80% of India’s commercial vehicle market. It also has a joint venture, Berger Nippon Paint Automotive Coatings Pvt. Ltd, focusing on passenger cars and three-wheelers with advanced coatings for major manufacturers.
Competitive shifts
The growing interest in industrial coatings also reflects broader market dynamics. After the entry of Aditya Birla-backed Birla Opus into decorative paints in 2024, competition in the segment has intensified, prompting incumbents to rethink their portfolio mix.
Analysts rank the pecking order as Asian Paints, Berger Paints, Kansai Nerolac, JSW Paints (including Akzo Nobel), Indigo Paints, and Birla Opus.
“Paint companies are increasingly shifting focus towards industrial coatings, attracted by structurally higher margins, better pricing stability, and faster growth prospects driven by infrastructure and automotive demand. Unlike decorative paints, which are highly competitive, promotion-heavy, and sensitive to housing cycles, rural demand, and discretionary spending—industrial coatings benefit from B2B, project-led orders with longer execution cycles and superior volume visibility,” said Anupama Reddy, vice president and co-group head, corporate ratings, ICRA Ltd.
Industrial paints are typically used across manufacturing, automotive, marine, oil and gas, and construction sectors to enhance durability and appearance, while decorative paints are used in homes.
India’s decorative and industrial paints market is projected to reach $15.04 billion by 2029, growing at a compound annual rate of 9.38% from 2024, according to an ICICI Direct report. Industrial paints account for about a quarter of the industry by value, with the rest coming from decorative paints.
“While historically the industry segment has grown slower than the decorative segment, industrial coatings are gaining momentum due to a push towards powder coatings and green technology, with some segments (like Infra) showing recovery. As a result, while decorative paints will continue to dominate volumes, industrial coatings are emerging as a key profitability driver for Indian paint companies,” Reddy said.
Still, analysts caution that the transition may be gradual.
“The paint makers’ optimism around industrial coatings can be seen as a strategic push to diversify their portfolios. However, this segment is inherently slower to scale, given its B2B nature where building relationships and securing client trust takes time. It remains to be seen how these companies perform, especially since competition exists here as well, even if a key incumbent is currently absent,” said Manoj Menon, head of research at ICICI Securities.