World of Colours

Index : 1,837 | 1Yr : +11.8% | 1Mo : -3.32%

Category : Sectoral Trackers

Min Investment : 6,687

Sharpe Volatility Trend

With rising demand in urban cities and rural trends undergoing transformation in the tier 2 & tier 3 cities, the paint industry has been flourishing in India. Historically the industry has grown 20 percent faster than the GDP and is expected to grow much faster in the future.

The Paint industry is highly consolidated with the top 5 companies controlling more than 80 percent of the organized market which accounts for two-thirds of the total share. The price of crude oil has a major impact on their profitability. Since the pricing is mostly inelastic in the short-term, these companies benefit with the fall in oil prices as their profit margins go higher.

The Government of India's agendas such as Smart Cities Mission & Housing for All will accelerate the growth of this sector to a large extent. A noteworthy shift is that, paint cycles which lasted 6 to 8 years in the past has now reduced to less than 4 years as people are preferring to refurbish the look of their homes more often. Change in consumer preferences in home decor, growth in the automobile and industrial sector are also expected to boost growth of the paint industry. This theme consists of companies which have a good track record of performance, innovation and overall growth.

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