The sector has seen an oligopolistic structure for many years, but will see increasing competition now as companies with robust financial muscle enter the market
The decrease in crude oil prices led to a jump in the stock prices of Indigo Paints and Kansai Nerolac Paints, which rose 5% and 2% respectively. Berger Paints, Akzo Nobel India, and Asian Paints also rallied between 1-2%.
Even though most brokerages had predicted some margin recovery for paint companies in Q1, the trends of rising input costs and increasing competition may soon water down those expectations.