Analyst's Diary: Thwarting attacks

A high-stakes scenario is playing out in India's paint industry. For years, the sector was dominated by a few giants, with Asian Paints reigning supreme and Berger Paints in the second spot. But the recent entrant, Aditya Birla Group's Grasim, has taken the industry by storm. It now aims to dethrone Berger Paints from its runner-up seat. With its deep pockets, Grasim is a formidable opponent. Its entry has justifiably unnerved investors. Berger Paints, once a D-Street darling that rewarded its backers with 37 per cent annual returns over two decades until April 2021, has been a laggard since then. Despite growing its annual profit by 18 per cent, the stock is down 13 per cent since July 2021. The fear is just The anxiety among investors is just. Grasim's entry with a massive investment of Rs 10,000 crore is no small threat. And it has set an enterprising target of growing its revenue by nearly 10 times to Rs 10,000 crore by the end of FY27. The company is clearly aggressive and ambitious. It has established six manufacturing facilities across India with a total capacity of 1.3 MLPA (million litres per annum), which will be fully operational by FY25-end. Berger Paints had a similar production capacity as of March 2024. Grasim has also ta