The June quarter turned out to be muted for the leading Indian paint makers as early arrivals of the monsoon and aggressive pricing by new entrants grew. Asian paints, Berger paint, Cansinerolak paint and Akzo Nobel India all reported modest numbers, but urban markets saw successive improvements, with price increases improving.Early monsoons weaken demandAsian Paint Managing Director and CEO Amit Single said the business had a major impact from the unexpected onset of rain.“Demand was better in April and May, but that was heavily influenced by the early monsoon, but I think the silver lining has been seen as a seed of demand sprouts in urban areas.The company reported that 1.19% of its standalone sales revenue fell to Rs 7,848.83. That volume of growth was 3.9% year-on-year, but the value fell 1.2%.Berger Paints CEO Abhijit Roy pointed out a “heavy monsoon towards the end of May and June.” The company saw an 11% decrease in its integrated net profit at Rs 315, and revenue from the business increased by 3.55% to 3,200.76 crore.Competition narrows down marginsIn line with the weather, strengthening market competition has become much greater. “The overall competition in the market has been fierce and there’s been a lot of new competition,” Syngle said, pointing to a new offensive player challenging the incumbent in the decorative paint segment.Kansai Nerolac’s Managing Director Pravin Chaudhari also highlighted the pressure. “Overall, in many places, the monsoon has caused some obstacles that have led to temporary halts, especially in some projects and retail,” he said. The company reported a 4.12% decline in consolidated net income to 215.6 crore, while revenue rose 1.35% to Rs 2,162.03.Akzo Nobel India reported net profit fell 20.6% to Rs 91, but said the quarter was “stressed” due to consumer sentiment and competitive intensity. CMD Rajiv Rajgopal said the revenue growth of top players remains “very flat.”Paintmakers are betting on the festive season to drive turnarounds. With Diwali coming earlier than last year, businesses are hoping for improved demand in August and September. “We believe that construction activities based on what we saw in June should be better as far as decoration is concerned,” Chaudhari added.The 75,000 Rs of Rs. 75,000 Indian paint industry is dominated by Asian paints, with Berger, Kansinerolac, Akzo Nobel, Indigo Paint, Shalimer Paint and Nippon Paint also competing for market share.
