Industry Battles One of the Toughest Demand Environments in Decades
Mumbai, India – Leading paint manufacturer Asian Paints has reported a 23% decline in net profit for the third quarter of the fiscal year, citing weak urban demand and inflationary pressures. The company, a key player in the decorative paints segment, described the current market as one of the toughest demand environments in the last 30 years.’
Sales Growth Stalls Amid Urban Weakness
Despite a modest 3.1% increase in net sales, Asian Paints struggled with declining consumer sentiment in metro cities and Tier-1 markets. The slowdown in premium product sales, particularly in urban areas, weighed heavily on profitability. While rural demand showed some resilience, it was not enough to offset the urban slump.
Margin Pressures and Rising Costs
The company’s operating profit margin fell to 13.2% from 14.8% in the same period last year, reflecting higher raw material costs and weaker demand. The operating profit stood at ₹1,197 crore, marking a 22.8% drop year-on-year.
“Urban markets remain sluggish, and consumer demand in premium categories is under pressure. We are adopting a cautious approach while focusing on cost optimization,” an Asian Paints spokesperson stated.
Key Financials – Q3 FY25 vs. Q3 FY24
| Metric | Q3 FY25 | Q3 FY24 | YoY Change |
| Net Sales | ₹8,175 Cr | ₹7,930 Cr | +3.1% |
| Operating Profit | ₹1,197 Cr | ₹1,550 Cr | -22.8% |
| Net Profit | ₹901 Cr | ₹1,170 Cr | -23% |
| EBITDA Margin | 13.2% | 14.8% | -160 bps |
Future Strategy: Rural Expansion & Cost Controls
To mitigate the impact of the slowdown, Asian Paints is expanding into Tier-2 and Tier-3 cities and strengthening its value-for-money product portfolio. The company is also exploring cost optimization strategies to protect margins in the coming quarters.
Analysts believe the decorative paints industry could see a gradual recovery, but macroeconomic uncertainties and inflationary pressures remain key risks.
Asian Paints remains cautiously optimistic about future growth, banking on improving rural demand and strategic pricing adjustments to weather the challenging market conditions.