Market Share Gain Prioritisation Over Margins In Paints Driving Delay In Price Hikes: ICICI Securities
A steel tool chest component is coated in red paint (Photographer Alex Flynn/Bloomberg)

Market Share Gain Prioritisation Over Margins In Paints Driving Delay In Price Hikes: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Despite 10-50% YoY inflation in input costs, market-leading paint companies have not yet increased selling prices (despite three years of price stability – last price increase was in FY2018).

Probable reasons, in our view, are -

  1. desire to gain market shares (accelerate formalization) and
  2. create speed-breakers to decelerate revenue performance of smaller players.

During FY2016-2021, due to multiple one-off factors such as demonetization, goods and services tax, Covid-19, slower economic growth etc., the business model of informal segment has been under stress.

Higher input prices have likely created stronger headwinds.

Click on the attachment to read the full report:

ICICI Securities Consumer Paints Update.pdf

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