We recently hosted S Mahesh Anand \u2013 vice president, the Indian Paint Association and president of Decorative Business, Nippon Paint (India) \u2013 for a discussion on the trends in the Indian paints industry. Till recently, paint companies largely focused on product portfolio, distribution network and brand building for growth. Paints manufacturers are now concentrating on new growth drivers, such as (i) skill development of painters to improve customer experience, (ii) automated tools and increased attention on service aspect to reduce the pain points in painting, and (iii) digital advertising, branding and promotions. Wide service offerings and skilled painters are reducing the hassles for painting, leading to premiumisation with cross-selling and upselling and increasing the frequency of repainting. The overall paint market grew 11.8% YoY (value terms) in FY18 to Rs 55,800 crore, driven by decorative paint growth of 12.9% to Rs 42,900 crore. The paint market is expected to register 12.5% CAGR till FY20, driven by a robust 13.4% CAGR in decorative paints. Competition remains rational in the paints industry as price changes are effected harmoniously among paint manufacturers. This, along with premiumisation trend, will help protect margin declines for paint companies. We remain positive on the paints sector with strong double-digit decorative paints volume growth forecast for the next few years, primarily driven by increase in paintable area with conversion of kutcha houses to pucca houses. Despite product improvement, reducing repainting cycle as a result of above measures strengthens our forecast. We maintain Asian Paints (APNT) and Kansai Nerolac (KNPL) as our top picks in the paints sector. We remain positive on APNT\u2019s recovery in volumes and believe KNPL will continue to witness strong doubledigit decorative paints volume growth.