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Paint-maker AkzoNobel India, which is poised to “grow and deliver”, is expecting both metro and upcountry markets to recover on the back of greater distribution reach, changing consumer preferences and pent-up demand.
The Indian arm of Dutch company AkzoNobel — listed on bourses here and headquartered out of Kolkata — is amongst the top four players in the country.
According to Rajiv Rajgopal, Managing Director, AkzoNobel India, the company has been working on expanding its offerings under the ‘Dulux’ brand. The upcountry market is seeing quicker-than-expected recovery and making the brand available there has been an ongoing process.
A water-based emulsion paint was launched as the company looked to tap the large economy segment.
Waterproofing solutions are also gaining traction across users in the decorative paints categories. After the unlocking, while growth was initially led by the economy segment, premiumisation has been coming back, even in non-metros.
Metro markets witnessed a revival post Diwali and the festival season. However, the second wave of Covid has put in some doubts on “how quick recoveries can happen” as restrictions come back.
Portfolio augmentation
“Recognising the shifting trends, we have augmented our portfolio with new launches, especially in health & hygiene and adjacent spaces. Some of our recent launches have been particularly well received. These include Dulux Promise SmartChoice (a water-based emulsion catering to the economy segment), Dulux SuperClean (a washable paint) and Dulux SuperCover, a premium emulsion with antibacterial properties,” he told BusinessLine .
“Over the last few quarters we have worked on improving the brand visibility. Now the plan is to tap into new markets, like in the upcountry and regain some lost market share. We see that happening over the next few quarters and it’s a step-by-step process that we are following,” Rajgopal added.
AkzoNobel India reported a turnover of ₹775 crore in the quarter ending December 2020; a top-line growth of over 7 per cent. Volume growth was in double-digits and gross margins were maintained at 45 per cent (of sales). Earnings before interest and tax stood at ₹115 crore; while profit after tax grew 14 per cent YoY to over ₹87 crore.
According to Rajgopal, the company has shored up its distribution presence to over 20,000 outlets.
Infra push
The last quarter saw revenue growth in other categories like powder, marine and packaging coatings businesses, too. Segments like power and oil & gas were impacted, while real estate has started to see an uptick.
A major push on road infrastructure, railways, power and auto as announced in the Union Budget is likely to lead to further improvement in the industrial coatings demand.
A risk to the industry comes from raw material prices which have started exerting inflationary pressures. Most players in the industry are evaluating the impact and the need for a potential price increase.
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