Asian Paints sees impact of rising competition amid muted demand environment

Given the slow growth in the paints industry, as a result of the muted demand sentiment, India's largest paints player Asian Paints Ltd. has seen the rising competition weigh on volumes and earnings.

In the post-earnings call with analysts, when asked about Asian Paints' market share dwindling amid the entrance of a new player in the market, Aditya Birla Group's Birla Opus, CEO Amit Syngle said, "I think we did not anticipate possibly the kind of competitive intensity which would come up, given the fact that demand was not there and everyone was fighting for the same share."

Discussing pricing, Syngle said that when looking at fighting competition on the pricing front, Asian Paints would only go as far as what the firm considers sustainable, and avoided unsustainable price cuts. "I do not think so it is a year's game. It is a game of looking properly at the next three years. Some of those performances can be just a flash in the pan in terms of what we can see in terms of what is really happening. I think sustainability is more important."

It's not like Asian Paints has not responded on pricing or product innovation. "We are focusing very clearly in terms of looking at the value proposition. It just has to be sustainable," he added.