Asian Paints Limited
VOLUME GROWTH: 7%
Volume growth: 7% (down from 10% YoY)
VALUE GROWTH: -3%
Value growth: -3% (down from 7.8% YoY)
CAGR VOLUME GROWTH:
CAGR volume growth: 15.3% over five years
INDUSTRIAL GROWTH: 5.8%
Industrial growth: 5.8% value growth
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Financial Performance
Overall, we see the value growth has been under real pressure at about -3% as compared to 7.8% in Q1-FY24.
This indicates a significant decline in value growth, highlighting challenges in pricing and product mix.
The heartening thing which we see is the CAGR volume numbers are still very strong, even if you look over a five-year perspective at about 15.3%.
Despite current challenges, the long-term volume growth remains robust, suggesting resilience in demand.
Business Operations
The volume growth has been still fairly healthy. We were gunning for double digit volume, we have landed at about 7%, which is still healthy over a big base of 10%.
This reflects a solid performance in volume growth despite not meeting the ambitious target.
We are happy to report that these overall categories have done very well.
This reinforces the company's strong position in the Home Decor segment, indicating successful market penetration.
Growth Initiatives
We spoke about in the last meet, one of our newer launches, NeoBharat Latex paint, which has been launched at the bottom of the pyramid level, to kind of really upgrade the unorganized distemper consumer into organized kind of brand, has done extremely well.
The successful launch of NeoBharat indicates a strategic focus on capturing the unorganized market segment.
Now we are at about 1.65 lakh retail touchpoints.
This expansion in retail touchpoints signifies a strategic move to enhance market reach and accessibility.
Market Dynamics
By and large, we don't think so that there is any competitive activity which is giving this performance.
This suggests confidence in the company's market position despite current performance challenges.
We see the rural markets definitely coming up. That is something which is being spoken about by other companies as well that they are seeing some shoots.
This observation aligns with broader industry trends indicating a potential recovery in rural demand.
Future Outlook
We have a full month of October, Diwali being 31st. So, I think, we have a full season of festive demand, which is there.
The upcoming festive season is expected to boost sales, indicating optimism for the next quarter.
We see further challenges which are going to happen, in terms of looking at further inflation, which we expect could be in the range of about 1.4-1.5%.
Management acknowledges potential inflationary pressures that could impact pricing and margins.