Aditya Birla Group flagship Grasim Industries Ltd's management told investors in its post-Q4 earnings call that despite an ongoing slowdown in volumes and price struggles in the decorative paints industry, it still remains optimistic of breaking even in its new decorative paints business, branded Birla Opus, within three years of the launch of full operations.
The company's management also noted that Birla Opus has reached a "high-single digit" market share in the paints segment, and has touched 10 percent, including the group's wall putty business. Grasim added that it is targeting a double-digit market share for Birla Opus alone in FY26.
Grasim is investing Rs 10,000 crore in the business to set up six plants across India, five of which have already been commissioned. The sixth one, at Kharagpur in West Bengal, is expected to head into trial production in June. The six plants will have a combined capacity of 1.332 billion litres per annum, which can be expanded by around 400-500 million litres per annum, at "minimum cost".
"The Rs 10,000 crore guidance within three years of full-scale operations takes into account that three years is a long period and you will have periods of some slowdown in periods of growth. As far as we are concerned, we are positive that the medium-term outlook will improve, while the market has been slow. So I think a couple of quarters here and there doesn't worry us, because the outlook for India is going to be bright," said Pavan K. Jain, chief financial officer at Grasim Industries.
The company has also spent significant resources on onboarding dealers, "influencers" such as painters and contractors, as well as company-owned and operated experience centres in major cities.
Most major decorative paint players have experienced low levels of volume and revenue growth, due to a marked slowdown in urban consumption, even as the rural market remains on the stronger end. The lack of control by companies over pricing has also been coupled with an intensified fight for market share, with incumbent players such as Asian Paints, Berger Paints, and others losing market shares to new entrants such as Birla Opus.
As for pricing in the market, the management said that it is currently providing discounting or volume additions in some of its products. However, it also highlighted that around 65 percent of the portfolio of Birla Opus is premium or luxury products, including its Calista brand and its various sub-brands. The management added that it is also poised to gain more market share in the east after the Kharagpur plant is fully up and running, which can also help reduce logistics costs.
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