Analyst Concall
Asian Paints says need 2 more qtrs for strong rise in demand
This story was originally published at 20:04 IST on 4 February 2025
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--Asian Paints: Haven't seen this kind of demand challenge in 3 decades
--CONTEXT: Asian Paints mgmt comments in post-earnings analyst call
--Asian Paints: Have to wait 2 more qtrs to see strong YoY growth in demand
--Asian Paints: Demand environment muted in overall industry
--Asian Paints: Urban markets showing slow growth
--Asian Paints: Cautiously optimistic of demand rising in next couple of qtrs
--Asian Paints: Good monsoon, rise in govt spend to drive growth, demand
--Asian Paints: Rural demand seen better compared with urban markets
--Asian Paints: See improvement in demand environment in Asia Jan-Mar
--Asian Paints: Rural demand expected to rise further Jan-Mar, Apr-Jun
--Asian Paints: Expect double digit growth in B2B segment in next 12 months
--Asian Paints: Should be able to maintain margins around 18-20% near term
--Asian Paints: Don't see much uniqueness in new competition pdts for now
--Asian Paints: Focus on scaling up industrial business going forward
--Asian Paints: Weakening rupee a concern, need to be watchful
--Asian Paints: Retail touch points reached 169,000 as on Dec 31
--Asian Paints: See pickup in demand for institutional business
--Asian Paints: New products contributed over 12% to Oct-Dec sales
--Asian Paints: See traction in government projects segment
--Asian Paints: Looking options to optimise operating expenses
By Narayana Krishna and Anshul Choudhary
HYDERABAD/MUMBAI – Asian Paints Ltd., a leading manufacturer of paints, decorative coatings and home decor products, indicated on Tuesday that a strong year-on-year demand growth in the industry may take another two quarters to materialise as urban demand remains subdued. Speaking at an analyst call, the company's management noted that the overall demand environment in the paint industry remains weak and that is likely to persist for a few more quarters.
The management said they haven't seen this kind of weak demand environment in the last three decades. The company said demand for paints was better in the rural markets compared with the urban. Rural demand is likely to improve further in Jan-Mar and Apr-Jun, when the effect of a good monsoon is likely to trickle down and also due to the increase in spending by the government.
For the December quarter, the Mumbai-based company reported a 23% on-year fall in its consolidated net profit to 11.1 billion. This is the third consecutive quarter that the company reported a fall in net profit. Revenue for the quarter, too, fell over 6% on year to INR 85.49 billion and the fall was the steepest in the last three quarters.
Asian Paints said the company has recorded decent growth in its business-to-business segment led by recovery in factories and automobile segments. The company wants to focus more on improving the business-to-business segment with an aim to grow in double digits. More
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