Asianpaint Ltd — Q3 FY25
Asian Paints reported a weak Q3 FY25 with decorative volume growth of only 1.6% and value decline of -7.8% YoY, driven by muted consumer sentiment, a shorter festive season, and...
bearish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
54%Questions answered3Evaded / deflected12Questions auditedContradictedNumbers vs filing
Partial answer
High priority
What drives cautious optimism on near-term recovery and when will sales value turn to YoY growth?
Asked by Avi Mehta, Macquarie Group
Management gave qualitative outlook but did not commit to a specific quarter for value growth recovery.
no specific timeline for value growthvague on when sales value will turn positive
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Question
Sir, I wanted to just better understand your cautious optimism on near-term recovery. What is driving this? And more importantly, by when do you expect sales value to start moving to YOY growth rates versus the decline that we've seen for the last few quarters?
Amit Syngle, CEO
So, overall, for quarter four, I think definitely what we are seeing is that the urban centers is appearing as a stress area for us... However, we see that rural demand should definitely be better... we would look at getting stronger value growth, possibly towards at least single digits as we kind of go forward. But right now, we see a stress in terms of the two quarters as we go ahead.
Partial answer
High priority
Is nine-month performance a good indicator for FY25 EBITDA margin? Need to revisit 18%-22% guidance?
Asked by Avi Mehta, Macquarie Group
Management did not answer whether nine-month performance is indicative, and revised margin guidance range without addressing the reason.
did not confirm nine-month as indicatorchanged guidance range from 18%-22% to 18%-20% without explanation
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Question
Sir, with input costs expected to remain benign and pricing largely through, would nine-month performance be a good indicator of the likely EBITDA margin for FY25? And sorry, again, a follow-up with that, is there any need to revisit our steady-state margin profile guidance of 18%-22% now that we have more color on the new competition and how they are behaving?
Amit Syngle, CEO
So we have been strong in terms of maintaining the PBIT focus in terms of going ahead. So we are very clear that we are not running after price strongly to that extent. We want to kind of really concentrate in terms of looking at some of the segments where we have a strong leverage in terms of going forward. And we would like to maintain our overall guidance of 18%-20% as we go ahead.
Answered
Medium priority
Are there any segments or geographies outperforming the broader demand trend?
Asked by Tejas Shah, Avendus Spark
Management clearly identified underperforming geographies (northern central) and better performance in non-seasonal markets.
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Question
Sir, just wanted to know, you spoke at length about the demand scenario. Just wanted to know, are there any segments or geographies which are outperforming the broader trend?
Amit Syngle, CEO
So overall, as I said, in quarter three, we saw that all the seasonal geographies, especially geographies which are centered around the northern central parts of the country... underperformed overall... some parts other than the seasonal markets across the country have been much better. And therefore, we see a clear differential in terms of growth, what we have seen in November and December as compared to October.
Partial answer
High priority
Has Asian Paints protected, gained, or lost market share in most territories?
Asked by Tejas Shah, Avendus Spark
Management acknowledged some share loss but did not quantify or confirm protection in most territories.
no specific market share number givenvague on whether share was protected or lost
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Question
Sir, perhaps early in the quarter, but any sense you would have got from your feedback on the ground on our markets' position, would we have protected it in most of the territories or gained or lost?
Amit Syngle, CEO
So overall, what we see as I was speaking, I think at the industry level, we are seeing the overall industry is definitely on a decline... I would say that at least the decorative industry is definitely ranging anywhere around -4% to -5% kind of a zone... there would be some shaving of shares here and there which is there, but nothing which is very, very significant in terms of what we see to that extent happening with us.
Evasive
Medium priority
Would you prefer to operate at 18% margin to revive demand or let it go as it comes?
Asked by Tejas Shah, Avendus Spark
Management avoided stating a preference, instead reiterating the range without committing to a specific target.
did not choose between 18% or 20%reframed to maintaining range
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Question
Sir, lastly, if I may, your guidance on margins 18%-20%, looking at the tailwinds and headwinds both... Would you prefer to operate at 18% given if there's a choice and revive demand, or you will let it go as it comes if you have to kind of go back to 20% in the near term?
Amit Syngle, CEO
So I think currently, demand is just not a function of just simple pricing... we would definitely like to overall spend monies in terms of really building the brand... we are working on a lot of initiatives so that we are able to kind of look at optimizing cost... we would still like to maintain our overall guidance between 18%-20% to that extent. It's very difficult to say that it should be only 18% or it should be only 20% to that extent.
Partial answer
Medium priority
How is Asian Paints controlling employee and OpEx costs despite competition and attrition?
Asked by Aditya Bhartiya, Investec Capital
Management explained productivity improvements but did not provide specific numbers or strategies for cost control.
no specific cost control measures quantifiedacknowledged sales expenses increased
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Question
My first question is that if we look at employee expenses and our overhead expenses this quarter, they haven't really grown much on a year-on-year basis. On a sequential basis, there has been a decline. In an environment wherein we are seeing competition intensifying, new players coming in, attrition for us has been going up a bit. How is it that we are able to control employee and OpEx costs? And what is going to be the strategy around this?
Amit Syngle, CEO
So as we look at it, definitely from a point of view of employee cost, as we had said that we had looked at possibly manning more people in the beginning so that we could kind of really cater to our network far more strongly to that extent. Post that, we have also taken steps in terms of how we can boost the productivity of the people much more... The sales and distribution expenses have gone up overall... we are kind of looking at seeing how we can basically optimize the overall operating expenses.
Evasive
Medium priority
Are cost savings and gross margin reduction baked into the 18%-20% margin guidance?
Asked by Aditya Bhartiya, Investec Capital
Management did not directly answer whether cost savings are offsetting gross margin reduction, instead spoke generally about cost optimization.
no confirmation of gross margin reductionvague on whether cost savings offset gross margin decline
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Question
And when you speak about 18%-20% margin guidance, are we baking in some of these cost savings and therefore thinking of slight reduction and maybe in gross margins and some savings coming through from OpEx, which kind of offset each other and we get to 18%-20% kind of margin?
Amit Syngle, CEO
Yeah. So it is an overall cost model we'll have to kind of look at. So it is, as I said, that is a far more holistic approach in terms of the cost which is being taken because you would like to kind of really spend the money in the right manner... So it's a combination in terms of looking at optimization, some of the operating levers... So that the whole overall area of cost is something which gives us a leverage to put the monies in the right manner... and still kind of really look at to some extent top line coming and maintaining the 18%-20% kind of margin guidance.
Answered
Medium priority
How large is the Neo latex paint category and how is it shaping up?
Asked by Aditya Bhartiya, Investec Capital
Management provided a clear estimate of category potential (5 lakh KL) and current penetration (7%-9%).
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Question
Also on new latex paints, if you could just give us some indication about how large the category is likely to have become for us and for the industry, and how do you see that shaping up going forward?
Amit Syngle, CEO
I think the overall kind of potential in the category is much, much bigger. Almost the potential is more than 5 lakh KL in terms of the overall category as I see it. As we have kind of seen it, we are just scraping possibly at the moment 7%-9% of that overall pie at the moment to that extent which is there. I think the potential is still very, very huge...
Answered
High priority
How is rural demand performing relative to urban? Any color on January trends?
Asked by Mihir Shah, Asian Paints
Management clearly stated rural demand is better than urban and provided positive January commentary.
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Question
On the demand environment, we understand the difference in urban demand. Can you share how well is rural doing? Should one think that rural is going much faster and urban is declining? ... And any color on how jan is shaping up if you can just show some insight to that?
Amit Syngle, CEO
So as I said very clearly, the urban centers, I think the demand has been slightly muted, whereas in terms of the rural, which we are seeing, demand has been much better in terms of the relative sense overall. We've also seen that the monsoons have been fairly good, which basically augurs well for quarter four and quarter one of next year... And some of those things we are seeing in the January itself also happening to that extent.
Evasive
High priority
What is your interpretation of new competition's product positioning and value proposition?
Asked by Amit Sachdeva, Carlyle India
Management downplayed competition's value proposition and did not detail their own response strategy.
dismissed competition as price-ledno specific response strategy shared
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Question
My question is that after a long time, such competition has happened in the paints industry... what is your interpretation of how the new competition has positioned its product? And what is the true value proposition thereafter to various stakeholders, whether it's trade as well as customer? And how you have responded to that?
Amit Syngle, CEO
So first of all, as we see it, there have been literally competitions earlier also... From a point of view of overall products, they seem to have products at all price points... But at the moment, very difficult to say that if they have a proposition for the customer coming into that extent. And a lot of things, obviously, at the moment are looking at price and discounting-led in terms of what we see in the market...
Partial answer
High priority
Did you indicate revenue decline will continue for two quarters before single-digit growth?
Asked by Jaykumar Doshi, Kotak Securities
Management did not clarify whether revenue decline will persist for two quarters, instead focused on volume growth aspirations.
did not confirm two quarters of revenue declineshifted to volume growth without timeline
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Question
First one is just a clarification on your earlier response to Abhi's question. You indicated that you're expecting stress to continue for at least another two quarters. Did you also indicate that revenue decline would continue for another two quarters and then maybe you move to a single-digit growth six months out?
Amit Syngle, CEO
See, overall, the attempt is very clearly that we should kind of really aim for single-digit volume growth in terms of going forward to that extent. And I think it all depends on the urban centers... But I think the attempt is very clearly that we have logged in about a 1.6% quarter three overall. So going forward, we would like to kind of really look at single-digit volume growth definitely happening and look at a better product mix so that we can get to a decent value growth.
Answered
Medium priority
What is the growth outlook and share of B2B business over next 12 months?
Asked by Sheela Rathi, Morgan Stanley
Management provided current share (16%-17%) and target growth (double-digit), with clear segment focus.
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Question
Sir, I just had one question, which was with respect to your comment around the B2B business. I mean, what kind of growth we are thinking of in this business? And is there a specific plan in terms of focus? And my question is more in context of where the trends could be over the next 12 months in this particular business. And what is the share of the B2B business now and where it could be?
Amit Syngle, CEO
So overall, going forward, we see strong trends coming in B2B because today we see that there's a lot of CapEx which is coming into India... Today, the segment would be somewhere in the range of about 16%-17% contribution, and we would definitely like to see that given the growth trajectory here. We have grown at very good numbers this year in quarter two, and we would like to kind of have double-digit kind of growth numbers as far as the B2B business is concerned.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Q3 volume growth 1.6% | 1.6% | -6% | Overstated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.