The Indian paint market is expected to reach Rs.

70,875 crore by 2019-20 from around

Rs.40,300 crore in 2014-15, the paint industry's apex body projected on Friday.

The decorative paint market is expected to witness CAGR of 12.7 per cent and the
industrial paint market CAGR of 9.5 per cent, according to Indian Paint Association (IPA)'s
to be launched report on the Indian Paint Market - "Size & Future of coating industry"
compiled by Nielsen Corporation. The split of the decorative paint market to industrial
market is around 75-25.

Decorative paint market size in the country was Rs 30,385 crore and the Industrial Paint Rs
9,915 crore in FY 2014-15, the IPA said in a release here.

The industry had grown at a CAGR of 12.9 per cent from 2011-12 to 2014-15 in terms of
value, it said adding that for FY 2014-15, the per capita consumption of paint in India was
estimated at 3.34 Kg.

High growth was witnessed for Exterior and Interior emulsions in the decorative paints
category and Auto refinish and Powder coatings in the industrial paints category.

IPA President Jalaj Dani said the Indian paint industry was on a growth trajectory.

IPA, an association of paint manufacturers both large as well as from the MSME sector
formed to promote and protect the interests of the paint industry, is holding its three-day
28th biennial conference here from today.

The meet provides an ideal and common platform for industry discussions on providing
differentiated customer experience, opportunities, challenges, market trends and best
practices, Dani said.

The domestic paints industry had been growing at a rapid pace over the years but it was not
accompanied by supply of adequate skilled talent, IPA said, adding, it has been working
closely with National Skill Development Corporation (NSDC) to bridge the talent gap.

Recently, IPA signed an MoU with NSDC under which it will train three lakh painters over
the next three years.
 Indias economic growth for 2017 and 2018 will be slower than earlier
projections, the International Monitory Fund (IMF) said in its latest World
Economic Outlook released on Tuesday. The report cited lingering impact
of demonetisation and the Goods and Services Tax for the expected slow
down during the current and the next year.
The IMF projected India to grow at 6.7% in 2017 and 7.4% in 2018, which
are 0.5 and 0.3 percentage points less than the projections earlier this year,
respectively.
Indias slowdown is happening while the world economy is picking up steam
and is projected to grow faster than earlier calculations, in 2017 and 2018.
The IMF has revised upwards global growth projections to 3.6% for this
year and 3.7% for next in both cases 0.1 percentage point above our
previous forecasts, Maurice Obstfeld, IMF Economic Counsellor and
Director of Research, said at a press conference at the beginning of the World
Bank-IMF annual meetings.
Union Finance Minister Arun Jaitley will attend the meetings.
Among emerging market and developing economies, higher domestic
demand in China and continued recovery in key emerging market economies
supported growth in the first half of 2017. In India, growth momentum
slowed, reflecting the lingering impact of the authorities currency exchange
initiative as well as uncertainty related to the midyear introduction of the
country-wide Goods and Services Tax, the IMF report said.

Safety risk: Manufacturing of paints involves steps that are

potentially hazardous if not done with due care and attention.
The manufacturing facilities continue to be certified under
ISO or similar industry standards for safety. Each plant has
an emergency response plan, which are periodically tested
through mock drills, drawn up to meet any eventuality.
2. Geo-political uncertainty: The world is getting increasingly
interlinked. The changes in EU, uncertain economic
prospects in large economies, increasing protectionism,
etc. have far-reaching and complex impact on global trade
and supply chain, talent and costs. The Company is closely
monitoring the situation, while trying to protect its business
interests in the market.
3. Information security: The Companys operations are
run on IT systems with a few applications exposed to the
internet. The risk of information assets of the Company
being exposed to unauthorised access and/or misuse is
inherently high. The Company has taken steps to backup

enterprise data at regular frequencies and has buffer/spare

server capacities for quick restart of critical operations in the
event of any mishap.
4. Consolidation in paint industry globally: We are
increasingly seeing consolidation happening across the
globe in the paint industry. The Company has operations
in various geographies where such consolidation could
lead to change in the market dynamics and impact its
competitive advantage. The Company is taking steps to
ensure impact on its operations are minimised.
5. Risk of earthquake: Two of the Companys manufacturing
facilities, viz. at Rohtak in Haryana and Khandala in
Maharashtra are located in seismic zone IV. The civil
constructions are resistant to withstand quakes of moderate
intensity. The Company has emergency response plans and
insurance cover on all its fixed assets and inventory lying
at these locations. However, an earthquake of a higher
intensity/duration or one leading to large scale devastation
of the entire geography, may impact production at these
facilities.
6. Currency risk: The Company operates in multiple
geographies and in many of the countries there are
significant imports of raw materials and capital goods. An
adverse and unforeseen fluctuation will lead to pressure on
the margins and on profitability. The industrial paint and
powder coating businesses are extremely price competitive.
The Company closely monitors the exposure while taking
currency hedges as and when necessary.
7. Ethical behaviour: The Company believes in running its
operations in an ethical manner. The Company has published
a code of conduct which is applicable to all employees of
the Company. The Company periodically communicates
to people, including contract employees, customers and
vendors to make them aware of its code of conduct. It
has a whistle blower policy to ensure that suspected/actual
violations to its code of conduct are reported, investigated and
acted upon.
8. Statutory compliance: The Company has compliance
obligations with diverse and complex laws and regulations
of the Central government, State governments as well
as local regulations specific to towns and cities where it
operates. Failure to comply with the laws and regulations
could lead to fines, penalties, damages and/or criminal
actions against employees of the Company. These laws are
subject to differing interpretations which could lead to any
of the risks mentioned above. The Company is committed
to comply with all laws and regulations as applicable from
time to time.

OUTLOOK AND RISKS

On the domestic front, the financial year 2017-18 has started
on a positive note with the progress seen on implementation
of the GST regime from the second quarter of the year. While
over the long-term it is expected to give a strong fillip to
the economic activity with rationalisation of the market place
and also boost competitiveness of the industry, it is bound to
have disruptions in the short term.
The impact of demonetisation felt over the last two quarters
of the previous financial year is expected to fade out and the

economy is expected to accelerate to about 7.4% growth for

financial year 2017-18 from the 6.7% growth in the previous
financial year on the back of a strong consumption demand.
However, the pace of investment growth would still remain a
challenge unless measures are taken to resolve the high NPA
levels in the banking sector.
A lot would also hinge on rainfall in the coming monsoon
season and the inflation level in the economy. Any adverse
rainfall conditions could have a detrimental impact on
consumption, especially the rural segment of demand.
Raw material prices have moved up significantly over the
last few quarters and coupled with any adverse demand
conditions, this could lead to a squeeze on the margins of
the industry.
On the international front, a gradual pick-up in crude prices is
expected. Despite the challenge of volatile currency, Egypt is
expected to gradually benefit from the improved competitiveness
and return of foreign investments to the market. However,
the recent imposition of emergency in Egypt along with the
continued challenges on foreign exchange availability make
the business conditions uncertain. The retail sentiment in
dampened due to the not-so-favourable government reforms
on consumption tax. Political stability in the two key markets of
Bangladesh and Nepal would be key to sustained performance
in these markets.
The home improvement segment has been drawing lessons
from its experience in an industry where several domestic and
international brands are vying for space. The Company continues
to adapt based on its market learnings, enhance its capabilities
and reach to strengthen its position in the market. Despite the
near-term challenges in this business, the Company remains
confident about the growth prospects for this business over the
long term.
The India story stands at a very interesting juncture today.
There are heightened hopes around the growth prospects of
the economy with the Government pushing forward its reform
agenda. The Government has placed a clear focus on areas like
smart cities, clean India and sanitation, which has a bearing
on the products and markets that the Company operates in.
The Company has consistently invested in building capabilities
to meet the requirements of the consumers and the market.
The Companys enviable strengths and the opportunities that
the market can offer, place the Company in a unique position
to deliver sustainable long-term performance over the years
to come.