Synopsis:
On Monday, Asian Paints announced plans to invest around Rs.2,000 crore in a new manufacturing plant in Indore, aimed at boosting capacity amid rising competition.
The shares of India’s largest paint producer, catering to both decorative and industrial markets, were in focus after announcing a Rs.2,000 crore greenfield investment plan.
With a market capitalization of Rs.2,44,595.44 crore, the shares of Asian Paints Limited were trading at Rs.2,543.05, up by 0.52 percent from the previous day’s closing price of Rs.2,529.95.
Expansion News
Asian Paints, India’s biggest paint maker, is planning to build a new greenfield plant in Indore, Madhya Pradesh. The company will invest about Rs.1,500 to Rs.2,000 crore in the project to expand its capacity.
The company is planning to build a few water-based plants on a large scale instead of many small ones in each state. The 9th plant is capable of producing 4,00,000 kiloliters across the country.
The new Indore facility will focus on decorative paints, which will account for approximately 95 percent of its capacity, while the remaining share will be allocated to industrial paints. The demand for industrial paints is rising more quickly, but they still make up only around 10 percent of the company’s total revenue.
A significant portion of the demand for industrial paints comes from government-led infrastructure projects, including roads, ports, railways, and defense. While auto and repaint demand were weak in the first few months, it is now improving. Asian Paints is growing by adding many new dealers each year to meet the rising demand. The company has a huge network of more than 1,65,000 dealers.
Asian Paints Limited’s shares have underperformed after Aditya Birla Group, through its flagship Grasim Industries, entered the paints business under the Birla Opus brand. The group has committed around Rs.10,000 crore Capex towards this venture, out of which Rs, 9,555 Crore has been used as of 30th June 2025, aiming to set up large-scale manufacturing and distribution networks to compete with established players like Asian Paints. The current capacity of Birla Opus has a production capacity of about 1,096 million litres per year, spread across five manufacturing facilities.
In Q1FY26, the Asian paints earned a revenue of Rs.8,924.49 crore, lower than Rs.8,943.24 crore in the same quarter last year. Net profit declined to Rs.1,117.08 crore from Rs.1,186.79 crore in the same quarter last year.
The company reported a negative ROE of 20.6 percent and an ROCE of 25.7 percent. Its P/E ratio is 63.38, higher than the industry average of 48.07, indicating the stock may be valued above its peers.
Written By Jhanavi Sivakumar
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