Mahad plant achieves backward integration as Morgan Stanley upgrades stock – targeting 5% paint market share amid Asian Paints dispute.
Grasim Industries Commences Resin Production at Birla Opus Paints Plant in Maharashtra.
Strategic Backward Integration Strengthens Paint Business
Key Milestones at Mahad Facility
✔ Resin Production Start: June 24, 2025
✔ Capacity: 22 million liters per annum (MLPA)
✔ Purpose: In-house supply for paint manufacturing
✔ Plant Totals:
- 180 MLPA water-based paints
- 30 MLPA solvent-based paints
- 20 MLPA distempers
Strategic & Market Implications
1. Vertical Integration Benefits
🔗 Supply Chain Control:
- Reduces dependence on external resin suppliers
- Ensures consistent quality for premium paint formulations
💰 Cost Optimization:
- Expected 5-7% margin improvement
- Mitigates raw material price volatility
2. Financial Performance
📈 Q4 FY25 Highlights:
- Revenue: ₹8,926 crore (31.9% YoY growth)
- Morgan Stanley Upgrade: “Overweight” with raised PT
- 15% YTD stock gain (vs sector avg. 8%)
3. Competitive Landscape
⚖️ CCI Complaint Against Asian Paints:
- Allegations of tinting machine access restrictions
- Potential to disrupt dealer networks if ruled favorably
🎨 Market Share Goals:
- Targeting #2 position in decorative paints
- 5% market share within 3 years
Technology & Production Insights
Resin Manufacturing Advantages
🧪 Enhanced Formulations:
- Customized acrylic/styrene-acrylic binders
- Improved washability & weather resistance
🏭 Eco-Friendly Processes:
- Zero liquid discharge systems
- VOC reduction technologies
Analyst Perspectives
“Grasim’s backward integration makes Birla Opus a formidable challenger in the ₹70,000 crore Indian paint market.”
— Morgan Stanley Report
“Resin self-sufficiency could be a game-changer in competing with established players on pricing.”
— Edelweiss Securities
Forward Outlook
🔹 2025-26: Ramp up to 80% utilization
🔹 2026-27: Expand resin capacity to 40 MLPA
🔹 2027-28: Target 10% decorative paints market share
Stock Performance
📊 Current Price: ₹2,805 (BSE)
📉 Today’s Movement: Marginal profit-booking
🚀 Long-Term Potential:
- ₹3,200 price target (Morgan Stanley)
- 20% upside potential