Relief rally in paint stocks after Birla Opus CEO exit; Here is what changed in paint sector in 2025

Shares of the Aditya Birla Group Company, Grasim Industries, plunged 6% after the Birla Opus CEO resigned from the company with effect from November 1. Consequently, shares of its peer group companies like Asian Paints and Berger Paints witnessed a positive reaction. Shares of Asian Paints rallied nearly 6% and Berger Paints rallied nearly 2%. The Paint Industry has seen a sharp change in dynamics after the launch of Birla Opus in February 2024. Here is an overview of what happened in the last 20 months.

Industry growth dynamics

The industry has witnessed turmoil in the overall demand story for the decorative paints category, leading to softer demand and uneven demand patterns. In FY24, the paints industry grew by ~4% amid rising demand concerns. The situation aggravated further in FY25 as Industry growth slowed down to 0-3% with stringent competition from new entrants. Demand pressure from urban metrics led to the overall slowdown. The slowdown was visible in the P&Ls of paint industry leaders like Asian Paints, whose FY25 revenue declined 4.45% YoY. Asian Paints is the market leader with more than 50% market share in decorative paints. However, rural growth helped minimise the impact on the key players like Asian Paints, Berger Paints and others.

Market share gains and losses

The entry of Birla Opus shook the overall industry dynamics as the company launched a massive capex plan of ₹10,000 crore with the second-largest capacity in the industry. In FY25, Asian Paints lost 7 percentage points in market share from 59% pre-Birla Opus to 52% after it. Whereas Birla Opus gained the market share in the range of ~6-10% in the same period, with its aggressive growth and marketing strategy. On the other hand, Berger Paints and Kansai Nerolac, which also operate in the decorative paints industry, faced minor losses in market share in comparison to Asian Paints.

Impact on profitability

With sluggish demand and rising intense competition, it has resulted in a double whammy for paint industry players, with leaders like Asian Paints reporting 4% drop in the topline and a 45% drop in the net profit. While other players like Berger Paints, Kansai Nerolac and Akzo Nobel India saw flat-to-negative growth during the same quarter. At the operational level, the material costs remained elevated, impacting EBITDA margins for the industry leader, like Asian Paints.

Share price performance

Amid the turmoil in the industry dynamics, shares of Asian Paints delivered -11% returns in the last year, while Akzo Nobel, Kansai Nerolac also delivered similar performance with losses in the range of 11% to 18%. On a YTD basis, Asian Paints shares jumped nearly 15% in 2025. While Berger Paints delivered 22% returns to date. On the other hand, Kansai Nerolac and Akzo Nobel India trade in negative territory for 2025.