The stock fell 4% in the past two trading sessions following mixed December quarter (Q3FY24) results. The decorative paints segment saw 12% year-on-year volume growth aided by double-digit expansion in both rural and urban markets in the festive quarter. However, consolidated revenue growth of 5.4% missed estimates due to price cuts and unfavourable product mix as luxury products grew gradually.
Importantly, hereon, the uncertainty of changing sector dynamics mainly pricing and market share, with the entry of newcomers, is likely to keep investors edgy. Significant capex commitment of new entrants is feared to intensify competition. Grasim Industries Ltd is gearing up for a decorative paints product launch in this quarter.
To beat competition blues, lure customers especially in smaller towns and curb downtrading, Asian Paints took price cuts of about 1.3% so far in FY24.
Esta historia es de la edición January 19, 2024 de Mint Mumbai.
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