List of Paint Stocks in India

Investing in India's paint industry presents a promising opportunity, with the sector experiencing significant growth due to infrastructure development, urbanisation, and higher disposable incomes.

According to Akzo Nobel India’s June 2023 report, the paints and coatings industry in India is projected to reach US$12.22 billion (Rs. 1 lakh crore) within the next five years.

With rising demand driven by the flourishing real estate market and increasing consumer spending, the outlook for paint stocks remains strong. However, with numerous companies to choose from, selecting the right paint stock can be challenging.

Here is a list of the five popular paint stocks in India as per market capitalisation (as of July 18, 2024).

Owing to rising competition and multiple new players emerging in the industry, the list keeps changing. While the market cap might remain constant, the ROE and analyst estimates can affect the preferences of investors in the paint stock market.

Here is a quick analysis of the top-performing paint stocks in India:
 

1. Asian Paints

Asian Paints has always been at the top of the list. It is one of the most popular paint stocks in India. Since 1942, it has earned the public's trust and grown to be one of the largest paint corporations in the country, with an ROE of 29.16%.
 

2. Grasim Industries

Grasim Industries is a global producer of multiple goods and materials. Its subsidiary, Aditya Birla Capital Limited, has recently ventured into the paint industry with the Birla Opus Range. The stock remains high on the list owing to the multiple sectors that the company dabbles in.
 

3. Akzo Nobel India

The company has prevailed as one of the leaders in the paint industry. For over five decades, it has maintained its position and remains a trusted brand operating under the name 'Dulux'. The company offers a solid ROE of 32.08%.
 

4. Berger Paints

Berger Paints has become one of the most popular paint suppliers and one of the top 10 paint stocks in India. The company is cost-efficient and has smart pricing strategies while offering an ROE of 21.71%.
 

5. Kansai Nerolac

A historic company previously known only as ‘Nerolac Paints’, it is quite popular and well-respected in the industry. The company has a great portfolio comprising a wide array of decorative and industrial coatings. It offers a respectable ROE of 12.31%.

Here are some factors investors must consider before investing in paint stocks in India:
 

1. Excess competition

New players have been aggressively entering the market and shaking up the rankings. Excessive competition is pushing companies to adapt to the latest technologies and trending marketing strategies to stand out. An investor can assess a brand's adaptability and past data to better understand their options in this growing market.
 

2. Economic trends

Changes in the economy, like GDP, the number of buildings being constructed, and how and where people are spending, affect the demand for paint. When the economy is flourishing, paint is expected to be in demand, but during economic downturns, less paint is typically needed. Such trends affect an investor's decision and time of investment.
 

3. Raw material prices

Socio-economic conditions can lead to market fluctuations and changes in the prices of raw materials used by the paint companies in their product development and sales.
 

4. Consumer choices

With so many choices, every customer looks for something different and new that the company can offer. This can range from a company's price point to uniqueness, sustainability, customer reviews, legacy, and the range of options available. Such factors affect a company's reception and performance in the paint stock market.

Some other factors that might not adversely affect the industry but do have a minor impact on the sector are given below:
 

5. Government policies

Government policies can indirectly impact the paint industry. For instance, if the Indian government launches a policy impacting the real estate sector, it can increase or decrease the number of properties being made or sold, which in turn will impact the paint industry. This is because if more houses move into development, their makeovers will require an additional supply of paint and coating materials, leading to an increase in demand.
 

6. Social media and makeover trends

Social media and Pinterest dictate industry trends these days. If the colour of the season is yellow, for instance, a consumer might consider doing a house makeover with shades of yellow on the walls. Such frequent makeovers not only work as mood enhancers but also help consumers stay up-to-date on trends for themselves and their guests.

The paint industry has experienced steady growth and increasing demand in the Indian market. However, several factors affect demand and supply here; raw material costs, new competitors, real estate policies, crude oil prices, climate and weather changes, and economic slowdowns are just some of the aspects that cannot always be controlled. Paint sales and paint stocks both have associated risks that impact investor profitability.

Hence, you must research well or seek the assistance of financial advisors before making any big investments. The industry is profitable, and many other sectors that use paint in their work and growth contribute to keeping it booming, which is why it can be a great addition to your portfolio. Careful consideration, risk analysis, and due diligence guarantee a solid investment opportunity in paint stocks in India.

Several industries are tied to the paint industry. Paints not only enhance the aesthetics of any given space but also add value to other segments such as real estate and infrastructure, packaging, woodwork, construction and decoration, and more. Hence, investing in paint stocks can be a wise decision for your portfolio, depending on the current market analysis.

However, we have to consider the risks attached to the industry. No sector is secure in this dynamic Indian market. This is why it is essential to consider all factors affecting the market and paint stocks in India before making any major investments.