Analyst Concall
Asian Paints sees intense competition continuing in Jul-Sep
This story was originally published at 20:12 IST on 29 July 2025
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--Asian Paints: Expanding distribution, have 170,000 touchpoints as on Jun 30
--CONTEXT: Comments by Asian Paints' mgmt in a post-earnings analyst concall
--Asian Paints: Saw good demand from builders, govt projects Apr-Jun
--Asian Paints: Working on cost efficiency; backward integration is on track
--Asian Paints: See revival in overall demand for Jul-Sept
--Asian Paints: Good monsoon expected to aid rural demand
--Asian Paints: Competition to remain intense Jul-Sept in paints industry
--Asian Paints: Focused on scaling up industrial business in Jul-Sept
--Asian Paints: Focused on scaling up industrial business in Jul-Sept
--Asian Paints: Focusing more on innovation to retain brand saliency
--Asian Paints: Green shoots seen in urban demand, to aid Jul-Sept growth
--Asian Paints: Expect some softening in raw material prices Jul-Sept
--Asian Paints: Keeping an eye on rupee volatality Jul-Sept
--Asian Paints:Targeting sustainable growth via higher marketing spends FY26
--Asian Paints: July demand has also beem hit by monsoon
--Asian Paints: FY26 capex seen at INR 7 bln, Apr-Jun spending INR 1 bln
--Asian Paints: Expecting single-digit volume, value growth in near term
--Asian Paints: EBITDA margin guidance steady at 18-20% for FY26
--Asian Paints: Anti-dumping duty likely to raise input costs by 1.5-2.0%
By Narayana Krishna and Shakshi Jain
HYDERABAD/NEW DELHI - Asian Paints Ltd., India's largest paint maker, on Tuesday said India's paint market will continue to witness intense competition in Jul-Sept and the company is focused on dealing with it through innovative products and maintaining the brand saliency. As long as the consumer and retailer remain loyal to the brand, competition will not affect the company, the company management said in a post-earnings analysts conference call.
Stating that discounts and other offers are a temporary phenomenon, the company management said the discount structure that the company is currently offering is within its planned trajectory and will continue going forward. The revival in urban demand and a robust monsoon are the key factors that will drive growth in Jul-Sep, the company said.
With the entry of new players like the Aditya Birla group's Birla Opus brand, Asian Paints is witnessing intense competition across markets. As paint manufacturers engage in dealer poaching and hefty discount wars, established companies like Asian Paints are under tremendous pressure, finding new ways to tackle the situation. Asian Paints management said, besides offers, the company is also adopting various new strategies like regional packings and launching popular colours suitable for those areas.
Asian Paints reported a 6% on-year fall in consolidated net profit in Apr-Jun to INR 11.00 billion. The company's revenue slipped 0.4% on year to INR 89.39 billion. The year-on-year fall in net profit in the June quarter was lower than in the four preceding quarters, when the company's net profit saw a 25-45% year-on-year decline. The company's June quarter sales were hit by the early onset of the monsoon and an overall slowdown in home decor segment sales, the management said. The company is expecting some impact in July as well due to heavy rains across regions.
Asian Paints management said the company currently has 170,000 retail touch points, and the focus is to expand the distribution network. The management said it is targeting sustainable growth by higher spending on marketing and not depending on discounts alone. The company is expecting single-digit growth in both volumes and value in the near term.
Asian Paints management said despite the impact of heavy rains in July, it expects overall demand to revive in Jul-Sept, as green shoots are evident in urban demand. The early monsoon across the country is expected to aid the rural demand, the company said.
Asian Paints is working to scale up its industrial paints business in Jul-Sept as there is good traction in this segment. The company management said it has witnessed good demand from builders and government agencies in the institutional segment in the June quarter and expects it to continue.
MARGIN GUIDANCE
Asian Paints retained its earnings before interest, tax, depreciation and amortisation margins guidance at 18-20% for 2025-26 (Apr-Mar). For the June quarter, the company reported an EBITDA margin of 18.2%, down from 18.9% a year ago. Anti-dumping duty on certain raw materials being imported from China has a bearing on overall margins. However, it is unlikely to be seen in the performance of the ongoing quarter due to high inventory, the management said. The impact of the duty on input costs is seen around 1.5-2.0%, the company said.
The company said its backwards integration of some products is on track, which may help the company to cut costs. The company is expecting some softening in raw material costs in the September quarter. The capital expenditure for FY26 is seen at around 7 billion, the company said, adding that out of it, nearly INR 1 billion was already spent in the June quarter. Currency volatility is another key factor for overall margins and the company is keeping an eye on it. In the June quarter, the currency-related issues in Ethiopia had an impact on margins, the company said.
On Tuesday, shares of Asian Paints ended 1.8% higher at INR 2,401.50 on the National Stock Exchange. The company detailed its quarterly financial results during market hours. The stock was down ahead of the earnings. End
Edited by Saji George Titus
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