InvestorQ : How do you see the rising competition in the paints sector in India?
Anamika Sodhani made post

How do you see the rising competition in the paints sector in India?

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Angel dcosta answered.
2 months ago
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Last week, Grasim decided to deepen its aggression in its paints venture tripling its investment from Rs5,000 crore to Rs15,000 crore. In response, the prices of paint stocks like Asian Paints and Berger Paints fell on competition fears. This is third big name to enter paints, apart from JK group and JSW group. That is a lot of deep pocketed competition. This move has raised some questions about whether the likes of Asian Paints and Berger can maintain their leadership in paints in the face of such intense competition.

It is not just about deep pockets but also the synergy and a new way of looking at the paints segment. Ultratech, part of the AV Birla group, has 30% of India’s cement capacity and the paints business will ride the same network of Ultratech and Birla White. The focus of Grasim will be on the OEM market, directly supplying paints to the builders giving them a natural fit with cement demand. This could be big story of demand growth as housing picks up.

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