Paints industry bets on rural demand to fuel growth
Times of India | 11 January 2025
12 Kolkata: The paints industry is pinning its hopes on rural demand to push growth. Over the last few quarters, the industry has witnessed muted growth following low urban demand, which is likely to continue for some more time. But rural demand has been on the rise. This was disclosed by industry captains during the AGM of Indian Paints Association here on Friday.
Berger Paints MD Abhijit Roy said in the last three quarters, there was a slowdown in overall growth as far as the paints industry was concerned. Roy said while average volume growth was 6-7%, value growth was even less. "Last year, there was a price cut of 5%, so there was an impact on value growth as well," he added.
The MD & CEO of Kansai Nerolac Paints, Anuj Jain, agreed with Roy. According to him, in the first half of this fiscal year, volume and value growth were low. "Some recovery is happening in the rural sector. In the next two quarters, rural segment would do well and it would drive demand," he said.
Roy pointed out that food inflation was very high, which had led to higher expenditure on food. "There was an overall slowdown in discretionary investments like paints. We are also expecting some tax breaks in the budget for the middle class, which would drive demand," he said.
However, Roy said in the long term, paints consumption would be good as urbanisation would continue. According to him, capacity utilization in the paints category in off-season was 65%, which generally goes up to 80% in peak season.