The war among paint makers in India may lead to mergers, and one of the major players in the decorative paints segment could have a significant role to play. The company has informed that its global parent is conducting a strategic review of its portfolio to redeploy capital towards growing its core coatings businesses. The initial focus will be on its decorative paints business in South Asia, with various strategic options being explored, ranging from partnerships or joint ventures to mergers or divestments.

The company holds a 5–6% market share of the decorative paints industry in the country. It maintains a premium and highly profitable position with a strong track record of growth. Given this market position, the company is well-placed to participate in the further development of the highly dynamic South Asian decorative paints market, which is ripe for consolidation.

Several business houses have recently entered the decorative paints segment, which was until recently oligopolistic. Major market leaders were followed by other established players. Currently, new entrants are vying for a share of the market at a time when consumer demand is subdued and input cost inflation remains a constant challenge. There is also discounting and competition from local unorganised players. In this environment, smaller or less serious players could struggle to grow.

The multinational company may command a premium for its business in India amid the competitive landscape. The global manufacturer is restructuring its operations to cut costs, improve efficiency, and become more agile in volatile markets.

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