Best Paint Stocks in India

23 April 2024
7 min read
Best Paint Stocks in India
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(The stocks mentioned in the blog are as per Market Capitalization)

Contrary to popular belief that paints solely enhance aesthetics, the paint industry serves various purposes and adds value to multiple sectors. It is used in various segments, including architecture, automotive, woodwork, transportation and packaging. The colourful solutions are used for resisting corrosion, preventing damage and elevating the overall visual appearance of the surfaces. 

The Indian paints and coatings sector is expected to surge by 10-12% in 2024. This growth is driven by competition, decreasing prices of raw materials and a steadily strengthening industrial environment.

Paint Industry in India - A Brief Overview

The paint industry in India is divided into 2 main categories: decorative and industrial paints. Decorative paints make up about 75% of the market, with various types like exterior wall paints, interior wall paints, wood finishes, enamels and related products such as primers and putties. Industrial paints account for the remaining 25% and cover segments like automotive, packaging, marine, protective, powder and other general industrial purposes.

In India, the paint industry is worth about ₹500 billion, with decorative paints being the dominant segment. The market size of the Indian paints and coatings industry is estimated to be around USD 9.56 billion in 2024. As per a report, it is projected to grow at a CAGR of 9.38% and reach USD 15.00 billion by 2029.

Note that this growth is attributed to rising industry demand, increasing construction activities, and technological advancements in paint formulations.

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Best Paint Stocks in India in 2024 as per Market Capitalisation

Here is a table mentioning the top paint stocks in India in 2024 as per market capitalisation:

S.No.

Top Paint Companies in India (as per market capitalisation)

1.

Asian Paints

2.

Berger Paints India

3.

Kansai Nerolac Paints

4.

Akzo Nobel India

5.

Indigo Paints

*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog.

Overview of Best Paint Stocks in India as per Market Capitalisation

Here is a detailed overview of the best paint stocks as per market capitalisation:

1) Asian Paints

Founded in 1942, Asian Paints Limited is one of the leading paint companies that provides painting and waterproofing solutions. It offers a range of industrial and decorative paints for interiors, exteriors, enamels and wood finishes.

It provides numerous solutions including painting services, interior design services, waterproofing solutions, wood solutions, modular kitchens, bathroom design and execution. It also offers waterproofing services for various areas including terraces, roofs, basements, ceilings, concrete walls, floors and filling cracks in residential, commercial buildings and other structures. 

The company’s manufacturing facilities are present in various states like Andhra Pradesh, Uttar Pradesh, Gujarat, Maharashtra, Tamil Nadu, Telangana and Haryana. Furthermore, Asian Paints operates across 15 countries and runs 27 paint manufacturing facilities worldwide, serving consumers in more than 60 countries.

2) Berger Paints India

Headquartered in Kolkata, Berger Paints India Limited manufactures and sells paints for residential, professional and industrial use in India and worldwide. It was established in 1923 as a subsidiary of the U.K. Paints India Private Limited.

Formerly known as British Paints (India) Limited, the company changed its name to Berger Paints India Limited in December 1983. The company's product range includes interior wall coatings like designer finishes, emulsions, ceiling paints and distempers, as well as exterior wall coatings such as emulsions, textures and cement paints. 

It also offers undercoats, including putty and primers, DIY paints like enamel spray paints, self-painting kits, glow-in-the-dark kits and wall stencil kits.

Additionally, Berger Paints provides protective coatings, automotive coatings, waterproofing solutions, flooring compounds, powder coatings, construction chemicals,  lacquers, sealants and sanitisation products. Berger Paints has around 16 manufacturing units in India and is present in 4 international countries, including  Bangladesh, Nepal, Russia and Poland.

3) Kansai Nerolac Paints

Kansai Nerolac Paints Limited (KNPL), which is a subsidiary of Kansai Paints Company Limited, operates as a company specialising in paints and coatings.  It produces a wide range of products, from decorative paints for homes, offices, hospitals and hotels to industrial coatings. The company provides interior wall paints, exterior wall paints, wood coatings, metal enamel paints, paint ancillary, interior textures, waterproof solutions and adhesives. 

Its industrial segment includes automotive paints, coil coatings, auto refinish paints, floor coatings, powder coatings, high-performance coatings and general industrial coatings.  

Kansai Nerolac Paints Limited runs manufacturing facilities in different cities across India. Moreover, it has established its presence in the Philippines, Kenya, Malaysia, Nepal, Bangladesh and Sri Lanka.

4) Akzo Nobel India

Akzo Nobel India manufactures, distributes, and sells decorative paints, performance coatings, and speciality chemicals. Akzo Nobel sells its products to homeowners, institutions, buildings, and industrial applications. In the homeowner segment, it offers paints ranging from interior to exterior, including emulsion paints, synthetic enamel, colourants, and thinners. 

Additionally, it provides colour concepts, mixing machines and training initiatives for the building and renovation sector. The company provides powder coatings, marine coatings, protective coatings, industrial coatings, and automotive and speciality coatings under the industrial segment. It provides products under renowned brands such as Elotex, Dulux, Levasil, Kramasil, International, Sikkens and Interpon. 

5) Indigo Paints

Incorporated in 2000, Indigo Paints Limited is a paint manufacturing company focusing on producing and selling decorative paints. It is known for providing interior emulsions, exterior emulsions, enamels, putties and primers, sleek wood coatings and other related products.

It also offers various types of emulsion paints, such as dirtproof and waterproof exterior laminate, exterior and interior acrylic laminate, as well as enamels like polyurethane (PU) super gloss enamel. 

In addition, the company provides wood paint for wooden surfaces and aluminium paint for surfaces like storage tanks, metal pipes and metal roofs. It operates manufacturing facilities in Pudukkottai (Tamil Nadu), Kochi (Kerala) and Jodhpur (Rajasthan). 

Factors to Consider Before Investing in Paint Stocks

Here are some essential factors you must consider before buying the paint company stocks in India:

  • Industrial Expansion

You should check how industrial growth impacts demand for industrial coatings and speciality paints. Advancements in sectors like automotive, manufacturing, and infrastructure drive this demand, potentially influencing the performance of paint stocks.

  • Raw Material Price

Crude oil impacts around 40% of the raw material costs for paint companies. Therefore, you must keep a close eye on fluctuations in crude oil prices as they directly influence the profitability and cost structure of paint manufacturers.

  • Rising Competition 

Monitor how companies navigate selling pressure and increased competition following the aggressive entry of new players. 

  • Financial Performance

Evaluate the financial health and performance metrics of paint companies, including revenue growth, profitability, debt levels and cash flow. Strong financial performance indicates a paint company's ability to manage its operations and generate sustainable returns effectively.

  • Economic Trends

Economic indicators such as GDP growth, construction activity and consumer spending affect the demand for paints. Investing during periods of economic expansion may lead to higher demand for paints, while economic downturns could dampen demand.

  • Consumer Preferences

Monitor evolving consumer preferences, including trends in colour choices, sustainability, and product performance. Paint companies that align with changing consumer preferences and offer differentiated products may gain a competitive edge in the market.

Should You Invest in Paint Stocks?

While the paint industry has shown resilience and steady growth, it is essential to weigh the associated risks. Fluctuations in raw material prices, particularly crude oil, directly impact paint prices, posing a significant risk to profitability. Moreover, economic slowdowns can reduce discretionary spending, impacting renovation demand and subsequently affecting paint sales. 

Additionally, climate changes, such as unpredictable rainfall, can disrupt demand patterns, especially in rural areas reliant on agricultural income. Furthermore, if the industry's infrastructure and construction activities slow down, it can dampen overall paint demand. Due to these challenges, investing in paint stocks requires careful consideration of industry dynamics.

The Bottom Line 

Opting for any company within the paint industry for investment is a prudent decision in the long term, considering their continuous growth. However, before investing in paint stocks, carefully evaluate the factors mentioned above.

Understand your risk appetite and seek guidance from financial experts to make informed investment decisions.

*Stock Selection Criteria for Top Stocks Based on Market Capitalisation

These stocks are chosen based on their market capitalization, which represents the total value of a company's outstanding shares. The selection is arranged in descending order, placing the largest companies first and the smaller ones later. This helps prioritize stocks based on their market size. 

It is important to note that market capitalization in no way guarantees a company’s performance or the returns from its stocks. However, it can be used as a criterion for shortlisting companies from within a sector. Investors should recognize that other factors, such as financial health, management efficiency, and market trends, play crucial roles in determining the actual success of an investment. 

This stock selection should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.).

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Aakash Baid

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Groww Invest Tech Pvt. Ltd. (Formerly known as Nextbillion Technology Pvt. Ltd) Ltd. do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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