The customer confidence appears strong in the current fiscal despite the challenging inflation and geopolitical uncertainties, says the Managing Director & CEO of India's leading paint manufacturer, Asian Paints.
The company foresees a strong consumer demand and a good festival season ahead with the prediction of normal monsoons, Asian Paints MD & CEO Amit Syngle said in his address to shareholders in the company's annual report for 2021-22.
Terming the recently concluded FY22 as another "tumultuous year", he said given the discretionary nature of the company's business, it got more affected with every wave of Covid-19 since customers looked at deferring their purchases.
While the demand conditions turned for the better post the second wave impact, all the businesses had to deal with the runaway inflation and supply shortages, adding its own complexity to an already difficult business environment, he added.
"As we look forward to this new financial year, the customer confidence appears strong despite the challenging inflation and geopolitical uncertainties. We foresee a strong consumer demand and with normal monsoons predicted we look forward to a good festival season ahead," said Syngle.
Discussing the macro-economic landscape, Asain Paints also raised concerns over an upswing in inflation across commodities and products has resulted in rising import bills and a depreciating rupee, which have compromised many of the import-dependent sectors.
"Businesses too will need to play this balancing act, addressing supply chain disruptions and inflationary concerns through innovative approaches and at the same time, entrenching the demand recovery," Asian Paints said in the annual report while sharing its outlook.
Over its segments, Syngle said for the decorative business, FY22 was another year of "stellar performance", making further inroads in the organised as well as the unorganised part of the paint industry.
"We delivered an industry beating revenue growth to further reinforce our leadership position," he said.
Asian Paints has been able to expand its retail presence across the emerging cities and the ever-growing small towns this year, using allied delivery channels and upgrading the retailing formats to meet the evolving demands of customers.
In the Home Décor space, Asian Paints aspires to become one of the best providers in India, offering digital, physical visualisation and execution for its customers, Syngle said.
"In order to ensure that customers get the best in Home Décor we have been able to expand ‘Beautiful Home Stores’ to various cities. We have now 29 stores and expanding these stores quite rapidly," he added.
Asian Paints' foray in the Bath and Kitchen space, has gained good momentum in the last two years registering exceptional revenue growth.
"We have looked at expanding this business significantly with innovations at the premium luxury end in a strong manner," he said adding "Kitchen and bath categories remain as a key focus in the Home Décor category given the huge potential of housing in India supported by the Government as well."
Asian Paints' industrial business also delivered good performance, despite challenges in both automotive and non-automotive segments. While the international business of Asian Paints was challenging for the company in FY22 with multiple hurdles emerging during the year.
"... the inflationary pressures coupled with significant currency devaluations across some key markets have significantly dented the profitability of the International business operations and this will clearly be a key area to improve in the coming year," said Syngle.
For the financial year ended March 31, 2022, Asian Paints'' revenue from the sale of products and services was Rs 25,002.1 crore.
