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Asian Paints Reclaims Q2 Momentum with 12.5% Revenue Growth amid Rising Competition

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  Published in Sports and Competition on Thursday, November 13th 2025 at 23:24 GMT by moneycontrol.com

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Asian Paints regains Q2 momentum amid a rising competitive landscape – a Money Control Research review

The paints and coatings sector in India, long dominated by a handful of major players, has begun to feel the pressure of a more fragmented market. Money Control’s latest research piece—“Asian Paints Q2 momentum back but is the competition increasing?”—provides a concise yet thorough examination of the company’s latest quarter, the forces shaping its performance, and the broader market dynamics that could alter its competitive edge in the coming years.

1. Q2 Financial Highlights

Asian Paints reported a solid rebound in the April‑June quarter of FY‑24, bringing its quarterly revenue to ₹18,700 crore, a 12.5 % year‑on‑year (YoY) increase. Earnings before interest, tax, depreciation, and amortisation (EBITDA) expanded to ₹3,200 crore, up 10 % YoY, while net profit reached ₹2,350 crore, a 9 % rise on the prior year.

The paint company’s top‑line growth was largely driven by:

The commercial and industrial streams, which include industrial coatings and automotive finishes, saw a notable uptick, reflecting renewed construction activity and infrastructure spending. The residential segment’s moderate 7 % gain underscores the company’s continued focus on premium home‑decoration products, despite inflationary pressures.

Margins were likewise favourable. The gross profit margin edged up to 19.4 % from 18.9 % in the prior quarter, driven by higher pricing power and efficient production planning. Net profit margin rose to 12.5 % from 11.9 %. Operating cash flow improved to ₹3,000 crore, enabling a 1.8 % dividend payout to shareholders.

2. Drivers of Momentum

2.1. Product‑Mix Optimization

Asian Paints’ strategy of prioritising high‑margin colour‑ready products paid dividends. The firm rolled out two new eco‑friendly lines, “Nature‑Blend” and “Ultra‑Gloss,” during Q2, capturing a growing segment of environmentally conscious consumers. These products have higher price points, helping to offset rising raw‑material costs.

2.2. Distribution Efficiency

With a network of more than 5,500 retail outlets and 4,000 modern trade points, the company leveraged its distribution depth to reach smaller retailers in tier‑II and tier‑III cities. An investment in a real‑time inventory‑management system reduced out‑of‑stock incidents by 15 %, improving customer satisfaction and driving repeat sales.

2.3. Pricing Strategy

Facing a 9 % rise in raw‑material costs (primarily titanium dioxide and pigments), Asian Paints increased its average selling price (ASP) by 6.5 %. The price hike was selectively applied to its premium segments while maintaining competitive pricing in the mid‑segment, thereby preserving volume.

3. Competitive Landscape

While Asian Paints has enjoyed market dominance for decades, the sector is experiencing accelerated competition from both domestic and international entrants.

3.1. Domestic Rivals

• PPG Industries – After its 2023 IPO, PPG has expanded its domestic footprint, targeting the commercial coating space with high‑performance products.
• Swaraj Paints – A fast‑growing niche player specialising in eco‑friendly coatings, Swaraj has carved out a 3 % share in the premium residential segment.
• AkzoNobel – The Dutch giant continues to strengthen its presence in the industrial coatings market, particularly in the automotive sector.

3.2. International Contenders

• Hempel – The Danish company is aggressively pursuing the industrial coatings segment with an emphasis on sustainability, raising the bar for performance standards.
• BASF – Leveraging its research arm, BASF has introduced a range of high‑end coatings that cater to premium commercial clients.

3.3. Market Share Dynamics

According to a recent industry survey cited in the article, Asian Paints held 57 % of the total market share in FY‑23. However, its share in the premium residential segment has slipped to 49 % from 54 % in FY‑22, signalling increased rivalry. PPG and AkzoNobel collectively captured an additional 7 % of the premium segment, while Swaraj added 4 % in the eco‑friendly niche.

4. Challenges on the Horizon

The research notes several headwinds that could erode Asian Paints’ growth trajectory:

1. Cost Volatility – Global supply chain disruptions have rendered raw‑material pricing erratic, threatening to squeeze margins if price increases cannot be passed on.
2. Regulatory Scrutiny – New environmental regulations (e.g., the Indian Ministry of Environment’s stricter VOC limits) require costly product reformulation, potentially delaying launches.
3. Consumer Shift to DIY and Online Platforms – A growing DIY segment, coupled with a surge in e‑commerce paint sales, means that traditional retail channels may need to innovate to stay relevant.
4. Capital‑Intensive R&D – To keep pace with competitors’ sustainability initiatives, Asian Paints must continue investing in R&D, which could strain capital budgets.

5. Outlook & Strategic Recommendations

Money Control Research concludes that Asian Paints’ Q2 rebound is a positive sign but cautions that the firm must sustain momentum in the face of rising competition. Key strategic moves recommended include:

The research piece also highlights that the Indian paints market is projected to grow at a CAGR of 5.2 % from 2024‑2029, driven by infrastructure spending and urbanisation. While this provides a favourable backdrop, the intensifying competition means that only those firms that innovate in product, pricing, and distribution will maintain leadership.

6. Takeaway

Asian Paints’ Q2 performance underscores its resilience and ability to adapt to market conditions. Yet the paints industry is no longer a two‑player game; a host of domestic and international firms are narrowing the gap. The company’s next steps—strengthening its premium and eco‑friendly offerings, embracing digital sales, and tightening cost control—will determine whether it can sustain its leading position or cede ground to an increasingly competitive field.