Raw material costs remain low and no price pressure is expected
Asian Paints achieved volume growth of 10.9% and value growth of 6%, a performance Syngle describes as ‘strong and broad-based’.
He emphasized that there is no immediate price pressure, thanks to a 1.6% deflation in raw material costs during the quarter.“Commodity prices have been favorable and we don’t see any pressure going forward,” Syngle said.
This stability is expected to help Asian Paints maintain its pricing strategy without the need for increases or concessions.
Strengthen margins; Maintain guidance for the entire year
Margins increased significantly during the quarter:
Standalone margins: 18.5%
Consolidated PBT margins: 17.7%
Gross margins: approx. 43%
Syngle attributed the strong margins to a healthy product mix and favorable input costs. The company maintained its full-year margin guidance of 18-20%, calling it “realistic and sustainable.”
Uneven monsoons hit outdoor paints, but rural and urban demand remains steady
The extended monsoons through October impacted the exterior paints category, but Asian Paints offset the impact through strong execution, regional initiatives and B2B momentum.Syngle noted that rural and urban demand grew at similar levels, with no major differences.
“Demand conditions were not great, but growth remained broadly based across regions,” he said.
International business is growing by 10% despite pressure on the African currency
Asian Paints’ international business grew 10.5% at constant exchange rates, led by strong performance in Nepal and Sri Lanka, growth in the UAE and double-digit volume growth across Africa, despite currency devaluation in Ethiopia
The company expects currency conditions to stabilize over the next six months.
Kitchen and bathroom areas see weakness, but recovery is expected in the second half of the year
While the decor division stores performed well, the kitchen and bathroom segments saw a single-digit decline.
Syngle attributed the weakness to muted demand, but remains optimistic:
“We expect much better performance in the third and fourth quarters as demand recovers.”
Car coatings in double figures; industrial segment is under pressure
The automotive OE coatings division continues to grow at double-digit rates, with strong mix and margin performance.
However, the industrial coatings division is facing competitive pressure, especially in the field of powder coatings.
Nevertheless, Asian Paints aims to maintain current margins in industrial paints.
Defending market share: innovation, regional playbooks and retailer ROI
As competitive intensity increases in the paint industry, Asian Paints is doubling down:
- Aggressive innovation and brand building
- Regionalized strategies and hyper-local marketing
- Strengthening relationships with retailers with better ROI
Syngle said the company’s performance in the first and second quarters shows that these strategies are already paying off.
“We have grown ahead of the market. Our strategy gives us a strong footprint for the coming quarters.”
Asian Paints remains optimistic about the second half of the year and expects recovery in the decor segments, steady demand and margin support from soft input costs.
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