Morgan Stanley’s latest dealer channel checks in the paints sector suggest that demand remains weak in Q4FY25, extending the sluggishness observed in the previous quarter. Feedback from 24 dealers indicates that new dealership additions in urban areas are beginning to compress dealer margins, reflecting heightened competition and limited pricing power.
While rural demand is expected to recover between April and May, urban demand revival may be pushed to the August–September period, as per dealer estimates. With discretionary spending patterns still cautious in both urban and semi-urban pockets, Morgan Stanley remains watchful on the paint sector’s volume recovery trajectory. The brokerage is also monitoring margin pressures amid high input costs and competitive intensity.
