New Delhi [India], October 1 (ANI): Paint demand is expected to improve further in October, supported by pre-festive stocking and a recovery in retail and project demand after the monsoon season, according to a report by Systematix Research.
The brokerage said paint industry volume growth has improved to 4-6 per cent after weak demand during July and August. Retail demand started recovering from the second half of September, while demand from the projects segment also improved as rainfall declined.
“Post-monsoon demand saw good pickup in western parts of India, especially in September month. October month is anticipated to see good growth. Late/longer Diwali usually aids in better demand growth for the industry. Now seeing 4-6% volume growth at industry level,” Systematix said.
The brokerage expects demand to remain strong during the festive season. However, it said smaller markets could see some pressure in the third quarter of FY27.
Tier-2, Tier-3 and Tier-4 cities account for around 25-30 per cent of the paint industry's sales. Systematix expects these markets to face weaker demand due to deficient monsoon rainfall and the possibility of lower agricultural output.
On prices, the brokerage said paint companies have already raised prices by around 16-17 per cent over the past six to seven months. It expects another 2-3 per cent price increase after Diwali, possibly by the end of calendar year 2026 or early in the first half of 2027.
“The dealer foresees an additional price hike of 2-3% post-Diwali, most likely by end-CY26 or early-1H next year. Some demand impact may occur due to price hikes,” Systematix said.
The brokerage said the paint industry has strong pricing power, but further price increases could lead some customers to defer purchases. It added that the latest price increase has come ahead of the peak festive season, which could limit the impact on volumes while helping companies improve margins.
Systematix also expects competition in the paint industry to remain high in the near term. At the same time, the availability of some key raw materials, including titanium dioxide/rutile and VAM, remains a concern due to supply constraints.
The brokerage said the recovery in demand during September and October is encouraging. However, the industry continues to face risks from weaker rural demand, further price increases, raw material availability and high competitive intensity. (ANI)
Paint demand likely to strengthen in October; industry may see 2-3% price hike post-Diwali: Report
