Paint industry unlikely to engage in price wars, says HSBC's Amit Sachdeva

Paints stocks extend fall amid concerns of margin pressure after Birla’s foray

In an interview with CNBC-TV18, Sachdeva said, “But largely we believe that rationality will prevail sooner and then the market will discount that – that is the reason for taking contrarian view in that space.”

Brokerage firm Investec has a pessimistic view of paint companies. They argue that Grasim's entry into the paint market, particularly with the launch of their eagerly awaited brand, Birla Opus, might disturb the established pricing norms.

According to the firm, Birla Opus has priced its products nearly 5% lower than existing competitors.

In a separate discussion with CNBC-TV18, on February 28, Hemant Jalan, CMD of Pune-based Indigo Paints said, “It is a strange industry in which the end consumer is really not the decision maker for the brand. The brand choice is influenced by the painter or the painting contractor. The end consumer merely holds a veto power.”

Also Read: 'It's a strange industry', Indigo Paints explains what makes it a unique business

For the entire interview, watch the accompanying video