Asian Paints Unfazed By Competition, Says CEO Amit Syngle
The unorganised sector will be impacted the most because of the rise in competition, according to the CEO.
Even with the increasing competition, it is business as usual and there will be no impact from it, according to Asian Paints Ltd.'s Amit Syngle.
There is no change in the company's stance when it comes to competition, said Syngle, managing director and chief executive officer at India's largest paintmaker.
“In the last four years, we have seen enough competition by new domestic companies and existing players that are looking at expanding," he told BQ Prime's Niraj Shah.
"Overall, the company's pillars (include) brand equality, world class supply chain, innovation, and overall excellence in having an ear to consumers,. Some of those pillars will really stand very strong, going ahead.”
The unorganised sector will be impacted the most because of the rise in competition, according to the CEO.
Second Quarter Performance
Asian Paints Ltd.’s second-quarter profit rose in line with analysts' estimates, but revenue growth remained flat on weak demand.
Its net profit rose 53.31% year-on-year to Rs 1,232.4 crore in the July-September period, according to an exchange filing.
Asian Paints Q2 FY24 Key Highlights (Consolidated, YoY)
Revenue up 0.24% to Rs 8,478.6 crore (Estimate: Rs 9,011.3 crore).
Operating profit up 39.8% to Rs 1,716.2 crore (Estimate: Rs 1856.8 crore).
Margin expanded to 20.2% from 14.5% (Estimate: 20.6%).
The quarter was below expectations and the overall demand trends across the segments were depressed, Syngle said. “We have pulled an overall volume growth of about 6% and about 1.1% in the paints segment, despite weak demand from rural areas.”
While the tier-1 and 2 areas were batting very well in terms of premium and luxury products, the company saw some downtrends in rural areas, he said.
There is a possibility of demand revival in the second quarter, but it will not see a huge upsurge, according to him.
“The story has been about the margin numbers this quarter.” Softening of raw materials aided in the significant improvement in the gross margin, Syngle said.
“Our expectation is that the raw materials will go up by 1-1.5% in the coming quarter, given the crude trends and geopolitical tensions."
