Diet Report Paints - Birla Opus offerings to remove pain from paint By Elara Capital
![](https://portfolio.investmentguruindia.com/uploads/news/Paints.jpg)
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Birla Opus offerings to remove pain from paint
We interacted with dealers who attended the Birla Opus launch meet recently from different geographies. Our checks reveal adoption of an aggressive stance to grab mind share away from rivals, Asian Paints and Berger Paints. Dealers offering Birla Opus are provided with lucrative offers addressing pain points. We believe Asian Paints (APNT IN, Reduce, CMP: INR 2866, TP: INR 2840) will have to counter Birla Opus; the quantum of its response will determine the trajectory of margin and market share.
Opus offerings to dealers
Offering |
Details |
Implication |
Impact on Asian Paints |
Higher in-bill discount vs peers |
In all luxury offerings (emulsion, wood finish and waterproofing), Opus offers 9-12% in-bill discount vs 1-2% by Asian Paints |
1. Reduced working capital and lower GST outgo for dealer and 2. Discounts not driven by quantity, thereby reducing undercutting |
High |
No pressure on target and inventory offtake |
No volume target for the next three years |
Helps company to build long-term relationship with dealers and improve visibility at the outlet |
Medium |
Aggressive loyalty program for dealers |
Lower entry slab vs peers; higher duration of 36 months vs annual for peers; flexibility to redeem points at any time in the program and freedom to choose between Trip/ Gold Voucher/ Car. |
Low |
|
Zero investment on tinting machine |
Tinting machine for dealer is offered at zero investment and consumes 40% less space than peers: it is a first in the industry with exclusive software and real-time updates on price & formulations |
No investment for dealer |
Low |
Opus offerings to contractor and painter
* Total points are 2-3x higher than APNT and offer tokens across pack points vs APNT, which offers only for bulk packs.
* Easy enrolment (no paper KYC) and instant credit & redemption of points to contractor or painter through direct bank transfer (DBT).
Our view: negative stance on the paints sector
We remain negative on the paints sector as we expect competitive intensity to rise in the medium term.
Please refer disclaimer at Report
SEBI Registration number is INH000000933
![](https://portfolio.investmentguruindia.com/uploads/news/LG30.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Venus Remedies Ltd.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/VIP Industries Ltd.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/ADF Foods.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/real estate sector_98.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/World Bank_04Apr.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/stock market 22.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/NMDC Ltd.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Tarsons Products Ltd.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/ChipsSemiconducter.jpg)
More News
![](https://portfolio.investmentguruindia.com/uploads/news/Metal sector.jpg)
Metals and Mining Sector Update : Better realisations to aid 3Q margins; Chinese demand key...
![Oil and Gas and Aviation Sector Update : Q4FY24 preview A more or less steady quarter for all by Emkay Global Financial Services](https://portfolio.investmentguruindia.com/uploads/news/Aviation1.jpg)
![Real Estate Sector Update :Residential: Encouraging signs for a strong ending to FY24 By JM Financial Institutional Securities](https://portfolio.investmentguruindia.com/uploads/news/Real Estate.jpg)
![Capital Goods Sector Update : Execution and margin to be key monitorables - Motilal Oswal Financial Services](https://portfolio.investmentguruindia.com/uploads/news/Motilal Oswal Financial Services.jpg)