印度涂料行业：经销商激励措施与生产效率分析

IndiaPratik Gothi*Analyst, India Consumer &Retail ResearchHSBC Securities and Capital Markets (India) PrivateLimiteopratik.gothi@hsbc.co.inNihal Mahesh Jham*, CFADirector and Consumer AnalystHSBC Securities and Capital Markets (India) Privatenihal.m.jham@hsbc.co.in+91 22 66283771Nupur Vyas*Associate, India Consumer &Retail ResearchHSBCSecuLimitednupur.vyas@hsbc.co.in+9122 40891584*Employed by a non-US affliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulationsHesitant bulls of summerThe 20th edition of the EM Sentiment Survey3m ADTV(USDm)Issuer of report: HSBC Securities and CapitalMarkets (India) Private LimitedViewHSBC Global Research at:https:/www.research.hsbc.com Market cap+18.7%+9.2% urities and Capital Markets (India) PrivateClick to viewFY27e EV-FY26e PEFY27e PEEBITDA3345.4x547.9x (USDm) 31.1x30.1x Competitive intensity elevated but incrementally stabilisingDealer incentives have achieved broad parity across key competitorsTo understand why wethink competitive intensity could stabilise, let's delve into the revenuerecognitionprinciplesofpaintmanufacturingcompanies.Thesecompaniesofferdiscounts(orrebates or incentives) like cash discounts, scheme discounts, annual turnover rebates andspecial discounts among others.These discounts are netted off from gross revenues to arriveatthe realised net revenues for the companies. The chart below indicates that discounts as aproportion of gross revenues had been consistently increasing in the industry since at leastFY19 and early trends indicate that FY25 might have seen a peak across the industry, with anaverage of between 16% and 18%. For example, Asian Paints' ratio for FY24 stood at 17.1%and it was 15.7% for Berger Paints.Birla Opus achieved gross revenues of between INR2.6-2.7bn in FY25 (as per the CompetitionCommission of India's order against Asian Paints, 3 July 2025) and net revenues of INR2.2bn(as per Berger Paints' management and HSBC calculations), which implies combined rebates,discounts and incentives of around 17-18% of gross sales.already giving dealers incentives of around 18% of gross FY25 revenues, we suspect dealerincentivesmighthavepeaked overFY25.While incentivescould remainatthese elevatedlevels in FY26, any incremental easing could mean higher net revenues for companies andmore importantly the beginning of an equilibrium in the industry structure. Note that in additionto the margins that the dealers receive, companies also have loyalty programs, paid vacationsand other promotions as added incentives, which might not be captured in this metric but thebroad trend might remn the same.In short, dealerincentives have achieved broad parity across key competitors and we think theycould everbe a potential tailwind for paint companies in FY26.Sbiscounts, rebates and incentives as a proportion of gross revenuesIncentivestodealershavebeenincreasingonaccountofcompetitionbutcouldhavepeakedinFY25evenascompetitiveintensityremainselevated-wecalculate17-18%forBirlaOpus20%18%16%14%12%10%8%6%FY17FV18FY19FY20FY21FY22FY23FY24FY25Asian PaintsBerger PaintsKansai NerolacAkzo Nobel IndiaIndigo PaintsAverageconsider reported total gross revenues for this exercise and not decorative business revenues. 20%18%16%14%12%10%8%6% Dealer incentives haveachieved broad parity acrosskey competitors and couldeven be a potential tailwindfor paint companies in FY26 你 Birla Opus' INR100bn target broadly in FY28e seems a big askBirlaOpusPaints(BO)hasadealer countof c.50kreaching6,600townsviaanetworkof137depots spread across India (as per Grasim's Q4FY25 call in May 2025). Management statedthat BO will addfurtherdealers over the next coupleyears and alsofocus on selling moreviaexisting dealers. Also, Birla Opus stated that 80% of these c.50k dealers have a tintingmachine, implying c.40k BO tinting machines have been deployed in the market over FY25. Thechart below indicates an important metric - average revenues / tinting machine acrosscompanies. Note that the same analysis can be done on a per dealer basis or by using grossrevenues instead of net revenues, but the broad trend will remain the same. We increasinglyseetintingmachineasanessential elementof networkexpansionforpaints companies-indeed incumbents' deployed tinting machines was thought of as a barrier to entry for disruptorslike Birla Opus but those notions have since been dispelled.Average revenues / tinting machine have declined across the industry over the last few years ascompanies continued to deploy their individual tinting machines to new dealers, withincremental tinting machines likely making relativelylowerrevenues.Birla Opus targets INR10obn in revenues in its third full year of full-scale operations (with allproduction plants up and running) and since commercial sales began at the end of April 2024indicates the INR100bn revenue target in FY28e implies c.INR2.2m in revenues / tintingmachine, higher than the INR1.6-1.7m achieved by Berger Paints' tinting machines -