Why Is Everyone So Into Paints?
Our aim through TVS Weekly is to break down financial stories and concepts simply, explaining what happened and why it matters to you.
No Jargon, no drama! Just stuff that actually makes sense.
Curious? Get more from us on our Instagram, WhatsApp, LinkedIn or YouTube. Our 1 Million+ family awaits you!
In this week’s newsletter, we will be learning:
An economic view on JSW Paints buying AkzoNobel
How Enterprise Value helps us value a business.
My advice on improving soft skills!
Market Kya Keh Raha Hai Sir?
First, Birla got serious with Birla Opus.
Now, Jindal’s JSW is making a ₹12,915 crore splash by buying Dulux’s parent company, AkzoNobel.
Everyone suddenly wants a piece of India’s paint market. But why?
What’s so attractive here? The numbers had hinted at this shake-up long before it happened.
That’s why this week, let’s decode the economics and strategies shaping the Indian paint industry.
What’s happening with JSW Paints?
JSW Paints entered the market in 2019, competing with giants like Asian Paints. It spent ₹900 crore to build products, expand reach, and grow its dealer network. For five years, it faced pricing pressure, big competition, and delays.
Still, it pushed through and finally turned profitable in FY24 with ₹2,000 crore in revenue. Although profitable, JSW Paint’s Parth Jindal wanted more.
A Bidding War
Parth Jindal knew that to take JSW Paints to the next level, he needed more than a distribution network. For this, the brand Dulux, with its strong brand and global backing, could be a great brand to have.
That’s why JSW Paints made a ₹9,000 crore bid to acquire Akzo Nobel India. But just before things were final, Indigo and Advent submitted a higher offer.
Jindal quickly matched it and secured exclusivity, showing JSW’s serious intent to reshape its place in the paints industry.
What’s happening in Indian Paints?
JSW Paints may have made a splash this week, but it is one in a line of new entrants to the paint industry.
After its launch in 2024, Birla Opus scaled fast with bold spending, hired top talent, and built deep distribution. It hit ₹2,600 crore in revenue & a 50,000+ dealer network in just one year!
All this isn’t great news for paint’s undisputed king. Asian Paints, once untouchable with a 59% market share, has dropped to 52% in just one year. Further, its Q4 FY25 profit fell 45% year-on-year.
Rising ad spending, dealer commissions, and pressure from new players like Birla Opus and JSW have left little room to breathe.
In a high-margin industry, new entrants coming in & squeezing the existing kings is not surprising at all; it’s actually plain & simple economics.
The Economics of It All
Paints have been delivering supernormal profits for years, with high ROCEs and steady demand growth of 1.5-1.75x of the GDP.
Thanks to this, the ₹80,000 crore industry could touch ₹3 lakh crore by 2034. No wonder new players lined up. Big margins attract big moves.
In the paint industry, where customers care about both price and quality, how a company grows is just as important as how it enters the market.
To understand how these new players plan to conquer the paint market, we can turn to a classic framework, Porter’s Competitive Strategies Model.
Strategies for Newcomers
To win in a competitive market like paints, companies often pick one of three classic strategies:
Cost Leadership: Keep costs low, sell at better prices, and still earn profits with volume.
For example, Jio disrupted telecom by offering the cheapest data, and DMart sells everyday goods at low prices by keeping operations lean.
Differentiation: Offer something unique so customers happily pay more.
For example, Tanishq stands out with trusted gold and elegant designs, while Nexa offers a premium car-buying experience in the mass market.
Focus: Serve a specific niche really well instead of targeting everyone. For example, Sabyasachi makes high-end bridal wear for elite buyers, and Bira 91 crafts bold beers for young, urban drinkers.
So, what’s the plan for JSW Paints?
Seeing that Dulux paints are expensive and carry a premium brand image, JSW Paints’ plan seems to lean towards product differentiation.
Instead of competing on price, it is trying to stand out through brand, quality, and customer experience.
And this playbook isn’t untested. Berger did something similar this year. Amid rising competition, Berger focused on premium emulsions and waterproofing, avoided a price war, and still managed to grow both volume and profit.
So while JSW’s success isn’t guaranteed, there is now a precedent that product differentiation can work, even in a price-sensitive market like paints.
In conclusion, India’s paint industry is going through a major shift. Once steady and predictable, it’s now buzzing with new players, big bets, and bold strategies.
JSW Paints’ ambition to break into the top 3 will come down to execution. Whether it's premium play work or not, time and the market will tell.
Is this a smart move by JSW Paints? Tell me in the comments!
Dalal Street Dictionary
Think of how most people buy a house today. They make a small down payment and borrow the rest.
Buying a business works similarly. The down payment is like the owner’s equity (market cap), and the borrowed part is the company’s debt.
So, if someone wanted to buy the entire business, they’d have to repay both the owners (equity) and the lenders (debt), ignoring any spare cash in the business. The convenient number which captures what the buyer has to pay is called Enterprise Value.
It can be calculated like this:
All numbers can be found in financial statements or screener sites.
But, how is this useful in markets?
EV is useful because it gives us a clearer lens to assess companies. Here’s how:
Shows the true cost of buying a business – EV tells you what it would actually take to acquire the whole company, including its debt, not just its share price.
Focuses on the money-making part – By subtracting cash, EV highlights the value of the operating assets, i.e., the part of the business that actually generates revenue.
Makes comparisons more meaningful – Two companies might look similar based on share price, but once you factor in debt and cash, their real value can be very different. EV helps you see that clearly
Bottom line: EV tells you what a business is truly worth, not just to a shareholder, but to a buyer.
Kaam Ki Baat!
The mistake is thinking it’s one big problem.
It’s actually two.
One is what you’re saying.
Do you understand your topic enough to explain it simply?
If someone asks, “Why did the stock fall?” can you answer in one line?
That’s not English. That’s clarity.
Two is how you say it.
You don’t need big words. You need practice.
Talk to a friend about a news article.
Ask a teacher a question in English.
Explain your work out loud to yourself.
Soft skills grow when you do both.
Know your stuff and say it simply.
Got a question that’s holding you back? Drop it in the comments!
MEME OF THE WEEK:
What More Caught My Eye?
The tale of India’s airport lounges.
The skill issue with MSMEs.
Trillion Dollar Digital Economy: Report
Amazon eyes diagnostics.
The Jane Street vs SEBI ban.
Recommendations
I recommend reading this sharp take on Malaysia’s rise from a colonial commodity hub to a Southeast Asian powerhouse.
A great watch if you're curious how smart policy and geography turned a small nation into a serious economic player.
Thanks for reading this weekend’s newsletter. I’d like to know your thoughts, so please feel free to comment below. Your feedback helps us improve!
And don’t forget to like, share, and restack!
Song of the Week:
This is Parth Verma,
Signing off.
Very informative insights for me ... Thank you
This was a awesome read 👏