Birla Eyes High Single-Digit Market Share In Paints Within A Year Of Launch

Grasim Industries Ltd. aims to position itself as a major contender in India's Rs 80,000-crore decorative paints market, setting a bold target of achieving Rs 10,000 crore in revenue within three years of operations.

"No paint company globally has ever launched in one shot—factories, operations, products and services—at the scale that we are about to undertake," Aditya Birla Group Chairman Kumar Mangalam Birla said during the launch of Birla Opus on Thursday. It is targeting double-digit growth year-on-year in the decorative paint business.

"Birla Opus is poised to transform the paint industry with a 40% addition to current capacity." The paints venture has six manufacturing plants with a total commercial capacity of 1,332 million litres per annum. "We will increase our capacity by 500 MLPA over the next five years," Birla said.

He also expects the paints venture to turn profitable in not more than three years of full-scale operations.

Birla Opus will offer 145 products with 2,300 colour choices. The company, however, said that it will be disclosing pricing only in the first week of March.

"With this, our portfolio is already at par and, in some segments, ahead of the market leader," Birla said.

The products will be available in Punjab, Haryana, and Tamil Nadu from mid-March this year and across all cities, covering 1 lakh people in towns in India by July. Chamarajanagar (Karnataka), Mahad (Maharashtra), and Kharagpur (West Bengal) units will commence production throughout fiscal 2025.

The plan is to expand distribution to over 6,000 towns by the fiscal end, which, according to the company, will be the fastest and widest pan-India launch by any paint brand. It is targeting 50,000 dealers by the end of the first year, with as many tinting machines as possible.

"We would be exiting next fiscal year with a market share of high single digits," Birla Opus Chief Executive Officer Rakshit Hargave said, reiterating the company's goal to become the second-largest player in the paints market, trailing only behind Asian Paints Ltd.

Asian Paints dominates half of India's paint market, boasting a revenue of Rs 9,075 crore as of December 2023. Currently, the paintmaker has a capacity of around 1,750 million litres per year.

Other players in the industry include Kansai Nerolac Paints Ltd., Berger Paints Ltd., Indigo Paints Ltd. and Akzo Nobel India Ltd. (the maker of Dulux paints).

Hargave added that Birla Opus will match the market leader in terms of advertising spend on an absolute basis. Asian Paints, for instance, spends about 4% of its revenue on advertising and promotions.

However, the brand has no plans to onboard brand ambassadors at the moment—a strategy that differentiates it from peers.

Aditya Birla Group's flagship company, Grasim Industries Ltd., has already spent Rs 5,000 crore and has committed to spending another Rs 7,000 crore by the end of fiscal 2025.

The company is funding the investment through debt and internal accruals. "Our debt-to-Ebitda is also at healthy levels. We don't expect this to cross about 3-3.5 times, even with the full capex of the paints business in the next financial year," according to the management.