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PAINT INDUSTRY ANALYSIS 
Presented By, 
Rarichan Mathew
PAINT INDUSTRY 
‱ Paint is any liquid or mastic composition that, after 
application to a substrate in a thin layer, converts to a 
solid film. It is most commonly used to protect, 
colour, or provide texture to objects 
‱ First company in paint Industry - Shalimar Paints, Color 
& Varnish Company, 
‱ The paints was generally imported from the Britain 
‱ In India Asian paints has the greatest market share of 
49% 
‱ Growth rate - 17% CAGR over the past seven years 
‱ In FY12, the paint industry stood at Rs 26,040 cr. 
Source : http://www.moneycontrol.com/news/business/indian-paint-industry-
INDIAN PAINT ASSOCIATION (IPA) 
‱ Came into existence on the 1st of July, 1960 
‱ To promote and protect the interest of the 
industries engaged in the manufacture of 
paints, enamels, varnishes and all other 
materials associated with the production and 
sale of those commodities. 
‱ President Ramakanth Akula
PAINT INDUSTRY 
Major Products End User 
Raw Materials 
(56%) 
Selling & 
Administration 
Expenses (23%) 
Employee Cost 
(12%) 
Decorative Products: 
Paint Emulsions, Varnishes,, 
Enamels, Distempers, Wood 
finishes, Metal finishes, 
Specialized paints (weather 
protection, Non-Toxic) 
Industrial Products: 
Powder coatings, Surface 
coatings, Floor coatings, 
High performance coatings, 
Specialised coatings(thermo 
protective, rust protective, 
non-combustible, etc.) 
(71%) 
Households, 
Construction firms 
(29%) 
Automobile OEM’s, 
Consumer Goods 
Manufacturers, Marine 
Industry 
Major Inputs
INDIAN SCENARIO 
Indian Paint 
Industry 
Decorative 
Segment(71%) 
Premium Range 
(High end acralic 
emulsions) 
Metro & Large 
Cities 
Medium Range 
(Enamel paints) 
Small Cities 
Distemper Range 
(Low end paints) 
Sub-urban & 
Rural Areas 
Industrial 
Segment (29%) 
Automotive 
sector(about 2/3 
rd share) 
Consumer 
Durables, Marine 
Paints & Other 
OEMs 
Source : http://www.indiainfoline.com/article/news/indian-paint-market
5 MAJOR PAINT COMPANIES
Competitor Analysis 
Company Business Model Founded on Headquarters Net Sales 
Growth 
Rate 
Net Profit 
Growth 
Rate 
ASIAN 
PAINTS 
Overall market leader due to 
leadership in decorative segment 
1942 Mumbai, 
Maharashtra 
22% 32.53% 
KANSAI 
NEROLAC 
Market leader in automotive 
industrial paint segment 
1920 Mumbai, 
Maharashtra 
15% 13.59% 
BERGER 
PAINTS 
Major revenue from decorative 
segment, also in industrial paints 
1923 Kolkata 16% 16.04% 
AKZO 
NOBEL 
INDIA 
Major revenue from decorative 
segment, also in automotive segment 
1911 Gurgaon, 
Haryana 
5% 17.63% 
SHALIMAR 
PAINTS 
Mainly focuses on decorative & non-automobile 
industrial coatings 
1902 Mumbai, 
Maharashtra 
13% 27.23% 
Others Decorative segment and Industrial 
paints 
- - - 
Source: Company reports, Bloomberg, BP Equities Research (www.bpwealth.com)
Market Share in India (2013) 
49% 
17% 
14% 
6% 
5% 
9% 
Asian Paints 
KANSAI NEROLAC 
BERGER PAINTS 
AKZO NOBEL INDIA 
SHALIMAR PAINTS 
Others 
Source: Company reports, Bloomberg, BP Equities Research (www.bpwealth.com)
Global Scenario 
Source : http://www.moneycontrol.com
PESTEL ANALYSIS 
POLITICAL FACTORS 
 India, the largest democratic country in the world 
 The political situation is more or less stable in nature 
 Export oriented Economy 
ECONOMIC FACTORS 
 Market based economy 
 Second fastest growing economy in the world 
 India is the third largest in term of purchasing power 
 Introduction of FDI in paint sectors
SOCIAL FACTORS 
 India is the second largest populated economy in the 
world 
 Rise in price of raw material 
 Import of raw material 
TECHNOLOGICAL FACTORS 
 Emerging of IT sector 
 Modernization of paint like (waterproof paints, 
Teflon coating, creating colors shops etc.) 
 Lead free paints
ENVIRONMENTAL FACTORS 
 Impact of volatile organic compounds (VOCs) 
 Lead free paints 
 Season and climate changes 
LEGAL FACTORS 
 Pollution Control Law 
 Health and Safety Law 
 Environmental Law
MICHAEL PORTER’S FIVE FORCE 
MODEL ANALYSIS OF PAINT 
INDUSTRY
THREAT OF NEW ENTRANTS 
 Paint market in India is dominated by few players, making 
it difficult for anyone newly entering the industry to 
compete. 
 It is estimated that 18-20% of the total raw materials used 
in the industry are imported 
Working capital needed is high-causes difficulty to local 
players & big firms enjoy economies of scale 
 Big players have high brand image & quality products & 
good promotional activities to attract customers 
Threat of new entrants is Low
THREAT OF SUBSTITUTES 
 In rural areas lime wash is used as substitute 
 Another alternative for decorative wall paints available today 
is Wallpaper 
 Availability of Paint varieties are there 
 Buyer propensity to substitute is low 
 Relative price performance of Decorative walls is High 
Availability of substitutes is Low
BARGAINING POWER OF SUPPLIERS 
 Raw material intensive production- over 300 raw materials 
make the final product 
 Raw materials-pigments, binders, additives, solvents, etc. 
 Titanium Dioxide is one of the key pigment used in he 
production of paint and is facing a global supply shortage. 
Thus supplier of this material has solid bargaining power. 
 Other raw materials-crude derivatives-have high price 
fluctuations affecting industry profits 
Bargaining power of suppliers is Medium
BARGAINING POWER OF BUYERS 
 Households and Industrial Users are the main customers of this 
industry. 
 For housing requirements, the buyers are building contractors 
who buy in bulk and end people who paint their house. 
Customers are more price sensitive because for them number of 
options are available and decisions are made based on quality, 
price and differentiating factors like weather protection, 
environment friendly paints 
 Industrial segment is low margin high revenue business and 
buyers of these segments are knowledgeable about their needs. 
Therefore, price comparison is done effectively by the 
customers. However, The leading Industrial paint suppliers have 
their expertise in their favour, which limits the bargaining power 
of buyers. 
Bargaining power of buyers as a whole is Medium.
COMPETITIVE RIVALRY 
 About 80% of organized sector contributed by top 3 
players 
 Current market growth rate can provide ample room of 
opportunity for all the players of the industry to flourish. 
 Asian Paints is the only paint company that manufactures 
PAN(phthalic anhydride) which is one of the main raw 
material for paint industry. 
 Presence of unorganized sector –can cause competition 
Competitive rivalry is Low
Porter’s Five Force Model for Paint 
Industry 
Threat of Substitutes: 
Low 
Competitive 
Rivalry: Low 
Bargaining Power of 
Buyers: 
Medium 
Bargaining Power of 
Suppliers: 
Medium 
Threat of new 
Entrants: 
Low
FUTURE PROSPECTS 
‱ Indian paint market is expected to reach 49,545 
Cr. by 2016 - 17 
‱ Use of water based paints is growing in the Indian 
paint market, new trends are catching up 
including paints with low VOC, no added Lead, 
Mercury, Chromium, odourless paints 
‱ Decorative paints segment is expected to witness 
higher growth going forward. The fiscal incentives 
given by the government to the housing sector 
have immensely benefited the housing sector. 
This will benefit key players in the long term. 
http://www.indiainfoline.com/article/news/indian-paint-market
Indian Paint Industry Analysis and Future Outlook

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Indian Paint Industry Analysis and Future Outlook

  • 1. PAINT INDUSTRY ANALYSIS Presented By, Rarichan Mathew
  • 2. PAINT INDUSTRY ‱ Paint is any liquid or mastic composition that, after application to a substrate in a thin layer, converts to a solid film. It is most commonly used to protect, colour, or provide texture to objects ‱ First company in paint Industry - Shalimar Paints, Color & Varnish Company, ‱ The paints was generally imported from the Britain ‱ In India Asian paints has the greatest market share of 49% ‱ Growth rate - 17% CAGR over the past seven years ‱ In FY12, the paint industry stood at Rs 26,040 cr. Source : http://www.moneycontrol.com/news/business/indian-paint-industry-
  • 3. INDIAN PAINT ASSOCIATION (IPA) ‱ Came into existence on the 1st of July, 1960 ‱ To promote and protect the interest of the industries engaged in the manufacture of paints, enamels, varnishes and all other materials associated with the production and sale of those commodities. ‱ President Ramakanth Akula
  • 4. PAINT INDUSTRY Major Products End User Raw Materials (56%) Selling & Administration Expenses (23%) Employee Cost (12%) Decorative Products: Paint Emulsions, Varnishes,, Enamels, Distempers, Wood finishes, Metal finishes, Specialized paints (weather protection, Non-Toxic) Industrial Products: Powder coatings, Surface coatings, Floor coatings, High performance coatings, Specialised coatings(thermo protective, rust protective, non-combustible, etc.) (71%) Households, Construction firms (29%) Automobile OEM’s, Consumer Goods Manufacturers, Marine Industry Major Inputs
  • 5. INDIAN SCENARIO Indian Paint Industry Decorative Segment(71%) Premium Range (High end acralic emulsions) Metro & Large Cities Medium Range (Enamel paints) Small Cities Distemper Range (Low end paints) Sub-urban & Rural Areas Industrial Segment (29%) Automotive sector(about 2/3 rd share) Consumer Durables, Marine Paints & Other OEMs Source : http://www.indiainfoline.com/article/news/indian-paint-market
  • 6. 5 MAJOR PAINT COMPANIES
  • 7. Competitor Analysis Company Business Model Founded on Headquarters Net Sales Growth Rate Net Profit Growth Rate ASIAN PAINTS Overall market leader due to leadership in decorative segment 1942 Mumbai, Maharashtra 22% 32.53% KANSAI NEROLAC Market leader in automotive industrial paint segment 1920 Mumbai, Maharashtra 15% 13.59% BERGER PAINTS Major revenue from decorative segment, also in industrial paints 1923 Kolkata 16% 16.04% AKZO NOBEL INDIA Major revenue from decorative segment, also in automotive segment 1911 Gurgaon, Haryana 5% 17.63% SHALIMAR PAINTS Mainly focuses on decorative & non-automobile industrial coatings 1902 Mumbai, Maharashtra 13% 27.23% Others Decorative segment and Industrial paints - - - Source: Company reports, Bloomberg, BP Equities Research (www.bpwealth.com)
  • 8. Market Share in India (2013) 49% 17% 14% 6% 5% 9% Asian Paints KANSAI NEROLAC BERGER PAINTS AKZO NOBEL INDIA SHALIMAR PAINTS Others Source: Company reports, Bloomberg, BP Equities Research (www.bpwealth.com)
  • 9. Global Scenario Source : http://www.moneycontrol.com
  • 10. PESTEL ANALYSIS POLITICAL FACTORS  India, the largest democratic country in the world  The political situation is more or less stable in nature  Export oriented Economy ECONOMIC FACTORS  Market based economy  Second fastest growing economy in the world  India is the third largest in term of purchasing power  Introduction of FDI in paint sectors
  • 11. SOCIAL FACTORS  India is the second largest populated economy in the world  Rise in price of raw material  Import of raw material TECHNOLOGICAL FACTORS  Emerging of IT sector  Modernization of paint like (waterproof paints, Teflon coating, creating colors shops etc.)  Lead free paints
  • 12. ENVIRONMENTAL FACTORS  Impact of volatile organic compounds (VOCs)  Lead free paints  Season and climate changes LEGAL FACTORS  Pollution Control Law  Health and Safety Law  Environmental Law
  • 13. MICHAEL PORTER’S FIVE FORCE MODEL ANALYSIS OF PAINT INDUSTRY
  • 14. THREAT OF NEW ENTRANTS  Paint market in India is dominated by few players, making it difficult for anyone newly entering the industry to compete.  It is estimated that 18-20% of the total raw materials used in the industry are imported Working capital needed is high-causes difficulty to local players & big firms enjoy economies of scale  Big players have high brand image & quality products & good promotional activities to attract customers Threat of new entrants is Low
  • 15. THREAT OF SUBSTITUTES  In rural areas lime wash is used as substitute  Another alternative for decorative wall paints available today is Wallpaper  Availability of Paint varieties are there  Buyer propensity to substitute is low  Relative price performance of Decorative walls is High Availability of substitutes is Low
  • 16. BARGAINING POWER OF SUPPLIERS  Raw material intensive production- over 300 raw materials make the final product  Raw materials-pigments, binders, additives, solvents, etc.  Titanium Dioxide is one of the key pigment used in he production of paint and is facing a global supply shortage. Thus supplier of this material has solid bargaining power.  Other raw materials-crude derivatives-have high price fluctuations affecting industry profits Bargaining power of suppliers is Medium
  • 17. BARGAINING POWER OF BUYERS  Households and Industrial Users are the main customers of this industry.  For housing requirements, the buyers are building contractors who buy in bulk and end people who paint their house. Customers are more price sensitive because for them number of options are available and decisions are made based on quality, price and differentiating factors like weather protection, environment friendly paints  Industrial segment is low margin high revenue business and buyers of these segments are knowledgeable about their needs. Therefore, price comparison is done effectively by the customers. However, The leading Industrial paint suppliers have their expertise in their favour, which limits the bargaining power of buyers. Bargaining power of buyers as a whole is Medium.
  • 18. COMPETITIVE RIVALRY  About 80% of organized sector contributed by top 3 players  Current market growth rate can provide ample room of opportunity for all the players of the industry to flourish.  Asian Paints is the only paint company that manufactures PAN(phthalic anhydride) which is one of the main raw material for paint industry.  Presence of unorganized sector –can cause competition Competitive rivalry is Low
  • 19. Porter’s Five Force Model for Paint Industry Threat of Substitutes: Low Competitive Rivalry: Low Bargaining Power of Buyers: Medium Bargaining Power of Suppliers: Medium Threat of new Entrants: Low
  • 20. FUTURE PROSPECTS ‱ Indian paint market is expected to reach 49,545 Cr. by 2016 - 17 ‱ Use of water based paints is growing in the Indian paint market, new trends are catching up including paints with low VOC, no added Lead, Mercury, Chromium, odourless paints ‱ Decorative paints segment is expected to witness higher growth going forward. The fiscal incentives given by the government to the housing sector have immensely benefited the housing sector. This will benefit key players in the long term. http://www.indiainfoline.com/article/news/indian-paint-market

Hinweis der Redaktion

  1. Compound Annual Growth Rate (CAGR) Indian paint industry at Rs 26,000 crore with 71 per cent of it being decorative paints and the remaining being industrial.
  2. http://www.moneycontrol.com/news/business/indian-paint-industry-to-touch-rs-50000-crore-by-fy16-ipa_810115.html?utm_source=ref_article
  3. http://www.indiainfoline.com/article/news/indian-paint-market-expected-to-reach-49545-inr-crs-by-2016-2017-ipa-study-5589228799_1.html
  4. Due to the economic slowdown, revenue declined in FY09. The global economy appears to be expanding again, pulled up by the strong performance of Asian economies and stabilization or modest recovery elsewhere.
  5. http://www.indiainfoline.com/article/news/indian-paint-market-expected-to-reach-49545-inr-crs-by-2016-2017-ipa-study-5589228799_1.html