Sirca has a good presence and leadership in coatings particularly in North India, which I believe even big boys tried and failed to establish vs Sirca’s Italian quality. Therefore, Sirca remained a preferred choice as far as wood and other coatings is concerned. Now they have decided to aggressively enter other markets, which I think they will succeed given their track record. The management in the past indicated that, their primary line of business would be coatings, while wall paints, putty and adhesives are like just add-ons, selling through the same channel without much increase in costs.
On the other hand paint segment is already getting crowded with big boys and there are other big ones lined up to enter the market with huge capex. So I see a big competition in the paint segment in the next 2 to 3 years. Probably Sirca’s management is aware of this and hence their main focus remained coatings instead of paints. This is the main differentiating factor of Sirca Vs others.
Now good thing is, Sirca gradually transforming into a full fledged manufacturer from being a trader. It has already announced that it will manufacture a number of Italian SKUs in India now. Plus it will manufacture resins in-house. A month ago, the company has released 2 tv commercial ads. https://www.youtube.com/watch?v=Ow0_xHDEEeU&ab_channel=SircaPaints https://www.youtube.com/watch?v=F3DvBANvRX8&ab_channel=SircaPaints
All these initiatives will give them operational leverage as well as improvement in financial metrics.
Disc: Biased and Invested at very lower levels.
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