Asian Paints Runs Into Dull Patch

In a tight spot

- Harsha Jethmalani

Asian Paints Ltd is feeling the heat as brokerages continue to slash earnings estimates following weak December quarter (Q3FY25) earnings. Not only that, the outlook for the next two quarters remains challenging due to persisting stress in urban demand. The management expects a gradual recovery only in H2FY26.

The company aims to drive single-digit volume growth in decorative paints while improving its product mix. However, consumer downtrading has led to faster growth in lower-margin mass and economy segments, keeping the product mix inferior and impacting profitability.

Asian Paints' domestic decorative paint volume grew 1.6% year-on-year in Q3, hurt by a weak festival season and muted urban demand. Standalone revenue, primarily from domestic decorative paints, declined 7.5%, a sharper drop than anticipated. Consolidated revenue fell for the fourth straight quarter.