iifl-logo-icon 1

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

  • Open Demat with exclusive Advice & Services
  • Get a dedicated Relationship Manager to help you grow your wealth
  • Exclusive advisory on 20+ trading & wealth-based investment options
  • One tap Investments, Automated trading & much more
  • Minimum 1 lakh margin required
sidebar image

Paints: Big bang launch of Birla Opus

26 Mar 2024 , 03:16 PM

Analysts of IIFL Securities attended the launch of Birla Opus Paints at Panipat today, interacted with the senior management team, and came away impressed at their strategy and ambition. In analysts of IIFL Securities note “Can entry barriers be broken?” written in Mar 2021, analysts of IIFL Securities had argued that entry barriers in the sector can be broken provided the company tackles product, dealer, influencers and consumer — all at once, and Birla has the ability to do so. Analysts of IIFL Securities note that today’s event makes the probability of their success higher in analysts of IIFL Securities estimation, as they have ticked off their checklist and also added some other items such as frictionless digitally enabled incentive scheme system and tinting machines with real-time data tracking. The management has laid out an ambitious target of Rs.100bn in third year of full scale operations; analysts of IIFL Securities believe that this could impact the top line and the bottom line for incumbents. Analysts of IIFL Securities maintain their cautious view on the sector with Asian Paints, Berger and Kansai rated REDUCE. 

Ambitious targets: 

The company laid ambitious targets of Rs100bn in the third year of full scale operations. In order to achieve this, the company is on a recruitment spree and targets 50,000 dealers by FY25 end. It has already recruited 3,500 dealers in 1.5 months in Punjab, Haryana and Tamil Nadu. Analysts of IIFL Securities believe that even if the company falls short of its targets, the ambition is not to be taken lightly and incumbents could get impacted with even partial fulfilment of these targets. 

Industry firsts: 

The company claims product superiority across several parameters vs competition and in order to demonstrate this, it plans to hold Expos (similar to FMCG companies doing product demonstrations to show product superiority vs competition) in all 1lakh+ towns shortly. Such large-scale expos are possibly an industry first. Similarly, a huge sampling program at scale (0.2mn painters being given 4 litres of paint free) to let the trade satisfy itself about the product is possibly a first in the industry. QR code on every paint pack, through which schemes will be digitally managed and sim card enabled tinting machines allowing for real-time inventory and sales tracking (implemented at scale), would also be a first-timer in the industry. 

Something for everyone: 

The company did not give much information on marketing the product, as it is yet to unfold. However, it assured us that the budget would not be much dissimilar vs the industry leader, despite the smaller scale. Dealers are likely to be incentivised well in margins (did not disclose exactly) but also via reduced inventory (better real-time tracking via tinting machines). For painters and contractors, schemes will be attractive, in addition to them being digitally enabled and dispute/hassle-free. Combined with the Birla brand name, claimed product superiority and best-in-class warranties — if executed well — the question will not be why anyone should use Birla Opus, but why not. 

Impact on incumbents:

It would be naïve to believe that Birla’s market share gain will come only at the cost of unorganised players. A ~100-200bps impact on growth may not seem large, but compounded over several years will be material. Moreover, margins too may face pressure on account of investments in product, marketing and trade schemes. On account of these factors, analysts of IIFL Securities believe that the valuation multiples, too, could gradually come under pressure. Therefore, analysts of IIFL Securities remain cautious on the Paints sector.

Related Tags

  • Paints
sidebar mobile


Read More
Knowledge Centerplus

Logo IIFL Customer Care Number
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

Knowledge Centerplus

Follow us on


2024, IIFL Securities Ltd. All Rights Reserved

  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.


Get better recommendations & make better investments

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp