Nearly two years after the Aditya Birla Group entered the decorative paints market with Birla Opus, fears of a bruising price war appear to have receded. Incumbent player Indigo Paints says the much-anticipated doomsday scenario for industry profitability has not materialised, even as competition intensifies across pricing and product categories.
Speaking during the company’s Q3 earnings call, Chairman Hemant Jalan asserted that industry margins have remained resilient despite aggressive spending and discounting by the new entrant. The paints sector had been derated by analysts on expectations of a sharp hit to profitability after Birla Opus launched with steep discounts and expanded capacity.
“Time has borne itself out that we were right. Nobody’s profitability has been impacted,” Jalan said, adding that while the new entrant may have gained some market share, it has done so at a significant cost to itself.
Birla Opus had entered the market as the “cheapest available” product with the “highest level of discount,” Jalan noted. Even after a recent 2–3% price hike, it continues to remain among the most competitively priced offerings in the market. However, this has not translated into an industry-wide margin compression so far.
The competitive landscape is currently marked by mixed pricing actions. While Birla Opus has raised prices marginally, AkzoNobel has implemented selective price cuts, and Berger Paints has adjusted prices in both directions across segments.
Jalan downplayed the broader significance of these moves, describing them as tactical rather than structural. According to him, pricing trends in the industry are largely dictated by the market leader, Asian Paints. In the absence of a decisive shift from the top player, the current equilibrium—marked by stable prices but competitive trade discounts—is likely to continue.
Instead of engaging in a full-blown price war, Indigo is leveraging its relatively high gross margins—reported at 47.1%, among the highest in the sector—to deploy calibrated trade discounts. This, the company indicated, provides headroom to compete for market share without eroding profitability.
“We definitely have room in our gross margins to do that,” Jalan said, signalling a strategy focused on selective aggression rather than across-the-board price cuts.