Shares of India’s largest paint manufacturer, Asian Paints Ltd., fell xyz% on Monday following the company’s disappointing quarterly results. In its post-earnings call on November 11, the management highlighted that they don’t expect a sharp recovery in the ongoing quarter due to a high base from last year. Although there is optimism for volume improvement, the company reported its first volume decline in over a decade (excluding the pandemic period), influenced by competition and natural disruptions such as floods.
Both gross and EBITDA margins for the September quarter declined year-on-year, and the company acknowledged that challenging demand conditions persist. Urban demand remains under stress, although the rural market showed resilience. Furthermore, competitive intensity continues to rise with new players like the Birla Group (through Birla Opus) and the JSW Group entering the market, heightening pressure from both organised and unorganised sectors.
As of 9:24 am the shares were trading 1% lower at ₹2,518.05 on NSE
Asian Paints anticipates that this competitive environment will persist, with elevated levels of discounting and promotions in the near term. For the full financial year, the company expects single-digit volume growth and aims to maintain margins between 18% and 20%.
To address the growing competition, Asian Paints has introduced several initiatives, including regional packs, advanced products with higher quality, attractive packaging, increased dealer margins, and a larger field sales force to enhance customer service.
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