Asian Paints is expected to deliver a stable performance in the December quarter, with better volumes and margin improvement partially countered by weak pricing and subdued demand conditions. According to analyst projections, the paint major is likely to show modest but steady growth across key financial metrics.

Revenue Growth Remains Modest

Brokerages largely agree that revenue growth in Q3 will stay modest despite improving volume momentum. The consensus view suggests mixed factors influencing topline performance:

Nuvama remains particularly cautious, citing persistent pricing pressures due to faster growth in lower-priced categories such as putty and construction chemicals. In contrast, Motilal Oswal forecasts relatively stronger growth supported by a weak base in the year-ago period.

Volume Recovery Drives Performance

Volume growth is expected to be the key positive factor in Q3, with most brokerages projecting domestic decorative paint volumes to grow in high single digits to low double digits:

• Kotak Equities: Around 8% volume growth
• Systematix: Closer to 10% volume growth
• Motilal Oswal: About 12% YoY volume growth

However, the gap between volume and value growth remains concerning. Several brokerages highlight consumer downtrading and a shift towards lower-priced products, which continues to pressure pricing. Nuvama notes that negative pricing and adverse mix continue to weigh on value growth, even as volumes recover from last year's lows.

Margin Expansion Expected

The most significant positive development is likely to be margin expansion, driven by favourable raw material costs and operational efficiencies:

Lower crude oil and titanium dioxide prices, along with operating leverage, are expected to support both gross and EBITDA margins. Kotak Equities notes that margin improvements will be aided by benign raw material environment and sourcing efficiencies, though partly offset by higher advertising and sales promotion spends.

Subsidiary and B2B Segment Outlook

Subsidiary performance is expected to remain steady but not serve as a major growth driver. Kotak Equities models low single-digit YoY growth for subsidiaries, similar to the September quarter performance.

The B2B segment provides a bright spot, expected to grow in double digits supported by government capital expenditure and infrastructure activity. This growth could help offset weakness in certain retail segments. Nuvama highlights that while exterior paint demand slowed due to unseasonal rains in October, this represents largely deferred demand that could shift to Q4.

Key Factors to Monitor

Investors will closely watch management commentary on several critical aspects including demand revival trends, competitive intensity in the market, pricing strategy adjustments, and the sustainability of margin gains going forward.

Asian Paints witnessed a significant block trade on the National Stock Exchange (NSE), highlighting institutional activity in the leading paint manufacturer's stock. The transaction represents a substantial off-market deal that caught market attention.

Block Trade Details

The block trade executed on NSE involved considerable financial value and volume, demonstrating institutional interest in the company's shares.

Market Significance

Block trades are typically executed by institutional investors, mutual funds, or large stakeholders looking to buy or sell substantial quantities of shares without impacting the regular market price. These transactions occur outside the normal trading mechanism and are settled at predetermined prices.

The execution price of ₹2,767.70 per share reflects the institutional assessment of Asian Paints' current market value. Such large-volume transactions often indicate strategic portfolio adjustments by institutional investors or potential stake changes in the company.

Transaction Impact

The block trade involving over 81,000 shares represents a significant volume transaction for Asian Paints. These off-market deals provide liquidity to large shareholders while minimizing market disruption that could occur if such volumes were traded through regular market mechanisms.

Block trades serve as important indicators of institutional sentiment and can provide insights into large-scale investment decisions regarding the company's stock.