Berger Paints, India’s second-largest paintmaker, is implementing a strategy to strengthen its market position against new competitors, including plans for new luxury paint lines and expanding its exclusive outlets. The company is also investing in new manufacturing facilities in eastern India. This strategy aims to counter pricing wars and secure market share in a sector anticipating growth driven by urbanization and real estate.
Berger Paints India Ltd., controlled by the billionaire Dhingra family, is fortifying its business as it seeks to fend off a challenge from deep-pocketed tycoons in the $8.2 billion sector. The Kolkata-based company, with a nearly 20% revenue share among publicly listed peers, has identified two key areas for expansion.
According to CEO Abhijit Roy, Berger is strengthening its teams in the weaker markets of Mumbai and Pune in the west, and Chennai and Bengaluru in the south. The firm also plans to launch a new line of luxury paints and add approximately 250 mostly exclusive outlets annually, aiming for a total of 2,500 outlets by March 2029.
This move comes after billionaires Kumar Mangalam Birla and Sajjan Jindal initiated a pricing war to gain market share from Berger Paints and sector leader Asian Paints Ltd., which holds over 50% market share. Birla Opus and JSW Dulux Ltd. are reportedly gaining ground, according to a note from brokerage PL Capital. Berger's shares have seen a decline of about 16% this year, compared to a 10% fall in the nation's benchmark index.
The company, valued at 525.4 billion rupees ($5.5 billion), is 64.56% owned by UK Paints India Pvt., which is controlled by Kuldip Singh Dhingra and his brother Gurbachan Singh Dhingra. They acquired the business in 1991.
Berger is also widening its distribution network and offering incentives to painters, builders, and architects to drive sales. The company is investing 20 billion rupees to build manufacturing facilities in West Bengal and Odisha by 2029 and 2030, respectively.
India’s paints sector is projected to grow to $11.8 billion by 2030, with an estimated annual growth rate of about 5%, according to IMARC Group. This growth is attributed to increasing urbanization, rising disposable incomes, and expansion in both commercial and residential real estate.
However, the competitive landscape, marked by aggressive discounts from newer rivals, has impacted the profit margins of Berger Paints and Asian Paints. The surge in crude oil prices due to the Middle East conflict has further added to the uncertainty for listed players, including Kansai Nerolac Paints Ltd. and JSW Dulux.
Roy stated that maintaining their current 20% market share is a solid baseline performance, with aspirations to gain an additional 0.5% nationally if market conditions are favorable. He anticipates that the upcoming festival season, leading up to Diwali in November, will boost demand and contribute to a slight increase in full-year volume growth to 8%, helping to offset a slow start to the year and higher raw material costs. Additionally, the industrial paints segment is expected to benefit from the country's infrastructure development.
