Feedback from the paint dealers indicate that local lockdown during the second quarter didn’t affect the business much, at least not as much as it did during the first lockdown last year. The decorative paints industry witnessed an overall strong quarter, with robust demand across all product categories and price-points. There was a mix of new and pent-up demand, though the latter demand may not spill over to the third quarter.
Of-course, the growth rate was partly aided by last year’s corresponding quarter’s poor show. Though August-September was slightly dull in comparison with July, overall it was a far better and inspiring quarter. The dealer up-stocking in September also indicate that they expect a good festive demand in the third quarter.
Further, dealers and contractors did not face labour shortage issues, unlike in the first quarter when they had returned to their villages in anticipation of lockdown 2.0.
The second quarter was also marked by a couple of price hikes resorted by all paint manufacturers across different products like emulsions, enamels and wood finishes, with the latest round effective from September. The industry has witnessed 6-7% price hike during the current financial year and more maybe expected in the coming months to mitigate the inflationary impact. However, dealers say that price hikes are unlikely to dampen the demand. The second quarter was also marked by low-key promotions, schemes and discounts.
Interestingly, unlike the case in the first quarter, rural markets have fared well given lower Covid impact in the region. Strong demand was seen in metro cities also as they were less affected by the pandemic this time.
According to some dealers, JSW Paints, though a newcomer in the industry is making its presence felt, especially in the southern market and giving the established brands a run for their money in some pockets.