Berger Paints Outshines Rivals in a Muted Quarter for Paint Industry

The January–March quarter (Q4) of FY25 proved challenging for India’s paint industry, with overall revenue growth among major listed players crawling in at under 3%. Dragging down the sector was Asian Paints, the market leader, which posted a year-on-year (Y-o-Y) sales decline the only one among its peers to do so.

Excluding Asian Paints, the sector managed a modest 5% growth, thanks in large part to Berger Paints. India’s second-largest paint company emerged as the clear outperformer, clocking 7.3% revenue growth its best showing in five quarters backed by a robust 7% volume growth for the second consecutive quarter.

In stark contrast, Asian Paints saw revenues shrink by 4% and volumes grow only 1.8%, marking its third weak quarter. Analysts attributed this slump to subdued urban demand, increasing downtrading, and aggressive pricing triggered by Birla Opus Paints’ entry into the market.

Berger’s relative success was driven by a focus on premium products and stronger price realisations. Its decorative paints segment rebounded with 4.4% value growth, compared to flat growth in the previous quarter, closing the value–volume gap to just 3%. The company’s strategic retreat from the overcrowded economy segment and an expanded presence in urban markets played a key role in its market share gains, particularly in metros where it had previously lagged.

Brokerages are cautiously optimistic. Elara Capital noted that Berger’s focus on high-margin categories and urban expansion cushioned it against weak consumer sentiment. Nirmal Bang and Kotak Research highlighted Berger’s resilience, though they questioned whether these gains could withstand intensifying competition in FY26, especially from aggressive players like Grasim and a potential AkzoNobel divestment.

Despite weak demand and rising competition, paint stocks remain richly valued, with the group trading at 30x FY26 earnings Asian Paints and Berger at an elevated 50x, close to their 10-year average.

While Asian Paints anticipates a demand recovery in FY26, Nomura has trimmed its FY26–FY27 earnings estimates by 6–8%, maintaining a ‘neutral’ outlook. Meanwhile, Kansai Nerolac received a rating upgrade from Elara Securities, though the brokerage awaits stronger growth catalysts before turning bullish.