According to brokerage estimates, consolidated revenue growth is expected to range between a 3% decline to a marginal 1% increase on a year-on-year basis. Motilal Oswal forecasts a 1% uptick in revenue, citing lack of visible improvement in the demand environment, particularly in urban centres. Nuvama, on the other hand, anticipates a 3% fall in consolidated revenue, noting continued pricing pressure and an adverse product mix.
Profit, on the other hand, is likely to fall 5% YoY, according to an average estimate of five brokerages. PAT is expected to show sequential improvement primarily due to the absence of exceptional items — the previous quarter had included a Rs 180 crore one-time expense.
The domestic decorative segment — which remains Asian Paints’ flagship business — is expected to see 7% volume growth, driven by relatively stable rural demand and recovery in project-oriented B2B segments.
However, value growth continues to trail, largely due to consumer downtrading and promotional pricing in lower-tier cities. Analysts believe the volume-value gap could narrow in coming quarters, supported by recent price hikes and better monsoon-linked sentiment in rural areas.
On the margin front, a favourable raw material cost environment is likely to support gross margins.Motilal Oswal expects gross profit margin to expand 130 basis points to 43.8%, while Nuvama sees a 107-basis-point improvement to 43.6%. However, both brokerages anticipate EBITDA margin contraction of around 40 basis points to 18.5%, due to negative operating leverage and elevated fixed costs.Asian Paints may also underperform smaller peers like Berger Paints, with analysts noting that its higher urban exposure and premium positioning make it more vulnerable to the current macro-led demand slowdown.
Overall, the quarter may reflect resilience in core volumes but also underline the challenges facing discretionary consumption in India’s urban heartland.
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