The agreement, which confirmed an earlier report by Bloomberg News, follows several attempts at a combination by the Dulux and Cromax brand paint makers
Strong rebound after a decline in revenues for six consecutive quarters
The paint company is on track to gain market share despite intensifying competition
Competition is intensifying, and Sirca’s margins are feeling the heat
Crude oil prices affect the paint business and tyre industries are they are raw material-intensive industry. Rising crude oil rates also increases the cost of producing items.
JSW Paints, which has failed to capture a meaningful market share in decorative paints business, is reported to have emerged as the winning bidder for AkzoNobel NV's stake in its India subsidiary, AkzoNobel India, for around Rs 9,000 crore
The deal, if concluded, would significantly expand JSW's footprint in the domestic paints sector, where it operates through JSW Paints, a relatively recent entrant
Birla Opus climbed to the third spot in the decorative paints market, emerging as a challenger to Asian Paints, which is now grappling with weak demand and falling profits.
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
Outperforming industry growth amid challenging market conditions
Though Asian Paints is a quality business, the competitive intensity in the sector has started show-ing its colours
Lower crude prices translate to softer input costs for paint companies like Asian Paints, as the manufacture of paint requires more than 300 items, most being petroleum-based.
Grasim Industries-owned Birla Opus paints' CEO Rakshit Hargave said that the business aims to finish FY25 with a high single-digit market share in the decorative paints business, while its first year in the business has turned out "more or less" on how it was envisaged
High competitive intensity continues to squeeze margins
Demand trends for the paint sector in January and February have seen a marginal improvement, noted global broking house JPMorgan.
While the company successfully retains market share, emerging competition casts a shadow on the stock's potential
The slowdown for most paint players likely started in Q4FY24 and intensified through the early quarters of FY25, amid rising crude prices and weakness in demand for the decorative paints segment, especially in the rural market.
The company faces demand headwinds, leading to a decline in both revenue and margin