Indian paint industry likely to clock revenue growth of around 12% in FY22: Crisil
Rating agency Crisil in its latest report has said that the Indian paint industry is expected to clock a revenue growth of around 12 percent in current financial year (FY22), with improving consumer sentiment and economic recovery driving growth in decorative and industrial segments alike. It also said the decorative and industrial segments of the domestic paints industry would regain the ground lost amid the second wave of the pandemic in the first quarter and strong balance sheets would keep credit profiles of the players stable. However, it also warns high crude prices would soften the margins of the industry players.
According to the report, the Indian paint industry is estimated to be around Rs 53,000 crore. It said higher spending on home improvement and refurbishing and a gradual increase in real estate activity are expected to drive revenue recovery of 11 per cent in the decorative paints segment. Also, it said this year, revenue recovery is expected to be more broad-based. Improving the pace of vaccination and easing of pandemic related curbs will drive growth in the urban areas.
On the other hand, the report stated that better rural incomes on the back of an almost normal monsoon will support recovery in the hinterland, which accounts for a sizeable chunk of decorative paint volumes. It said last fiscal, while the overall paint sector registered only 4 per cent growth, the decorative segment had fared better due to strong demand from the hinterland, which was less impacted by the first wave.
