Earlier this month, India’s largest paintmaker surprised the markets when it reported a forty five% drop in quarterly earnings and a 33% stoop in consolidated earnings for the total yr via March 2025.
Asian Paints, which was arrange 5 years earlier than India gained independence in 1947, blamed a weak demand setting for the poor efficiency that additionally confirmed in its income—gross sales fell 4.3% through the January-March quarter and slipped 4.5% for the total yr. Worse, it stated demand situations had been unlikely to enhance anytime quickly.
The corporate hadn’t seen such demand situations within the trade over the “final 20 years”, its CEO Amit Syngle stated. “At present, given the general setting… (we) don’t see acceleration in demand,” he added.
To make certain, Asian Paints has been disappointing the markets and buyers for the previous few quarters. Its shares have misplaced practically a 3rd of their worth since September final yr when the inventory markets reached all-time highs. And the shares haven’t managed to recoup the losses despite the fact that the benchmark indexes at the moment are only a shade away from the height.
Nonetheless, the most recent numbers and the CEO’s feedback replicate a matter of significant concern—not only for the corporate itself but in addition for your entire paints trade in addition to the broader economic system.
Why is that, chances are you’ll ask? Properly, the paints trade’s efficiency straight correlates to the efficiency of various different sectors akin to actual property and automotive. It is also linked on to family consumption. So, if gross sales of homes or workplaces are sluggish or if folks aren’t shopping for as many as vehicles and bikes than earlier than or if households fearful about stagnant wages are tightening their budgets, the paints trade is straight affected.
Asian Paints isn’t the one one going through the pinch. Smaller peer Kansai Nerolac Paints this week reported a 7% drop in fourth-quarter revenue whereas income inched up 3%. Akzo Nobel India, the maker of Dulux paint, reported a 0.3% fall in quarterly revenue whereas income rose solely 5% and bills elevated by 6%. Berger Paints, the No.2 by market share, managed to beat expectations as quarterly revenue jumped 18% and income climbed 7%.
Slowing demand isn’t the one drawback that Asian Paints is going through. Its greater headache is the fast enlargement of Grasim Industries, the textiles-to-chemicals arm of the Aditya Birla Group.
Grasim entered the paints sector in February 2024 underneath the Birla Opus model. It goals to ramp up its income to Rs 10,000 crore by 2027 and take the No.2 spot from Berger. And it appears to be properly on track to doing that.
Birla Opus has already gained a 6.8% share due to aggressive enlargement that features establishing factories, hiring executives and providing reductions to sellers. In the meantime, Asian Paints’ market share dropped to 52% from 59% a yr in the past, Reuters reported this week, citing Elara Securities information.
And competitors is about to accentuate with one other diversified conglomerate—JSW Group—searching for to increase shortly. The Sajjan Jindal-led group entered the sector in 2019 however is now urgent the pedal and is within the race to accumulate Akzo Nobel India. A deal for the Dulux proprietor will assist JSW Paints enhance its market share and meet its goal of Rs 5,000 crore for the present fiscal yr from about Rs 2,000 crore in 2023-24. That may imply one other headache for Asian Paints.
Taking Account
Asian Paints isn’t the one firm underneath intense strain. IndusInd Financial institution, India’s fifth-largest private-sector financial institution, has been grappling with one problem after one other for the previous a number of weeks.
Final month, the lender disclosed derivatives lack of Rs 1,960 crore and admitted to accounting irregularities. This prompted the Reserve Financial institution of India to step in and compelled CEO Sumant Kathpalia and deputy CEO Arun Khurana to step down. Final week, the financial institution all however admitted to violations of insider buying and selling norms by Kathpalia and Khurana. It stated that an unbiased overview discovered points which will have to be assessed from an “insider buying and selling perspective”.
This week, extra accounting irregularities got here to gentle. The financial institution stated an inside audit discovered that its microfinance arm incorrectly recorded Rs 674 crore as curiosity over three quarters of 2024-25. The quantity was reversed on Jan. 10, 2025. The financial institution additionally discovered “unsubstantiated balances” of Rs 595 crore in its “different property” accounts. This quantity was set off in opposition to corresponding balances showing in “different liabilities” accounts in January 2025.
IndusInd stated it was taking steps to strengthen inside controls and repair accountability of the folks answerable for the lapses within the microfinance enterprise.
Whereas IndusInd’s color appears to be fading quick, one other financial institution is getting again its misplaced color.
Late final week, Sumitomo Mitsui Banking Corp agreed to purchase a 20% stake in YES Financial institution for nearly $1.5 billion. Japan’s second-biggest financial institution will purchase the stake from State Financial institution of India and different lenders that had rescued YES Financial institution as a part of an RBI-led restructuring in March 2020. The deal is a win-win. SBI and different lenders will get a few of their a refund, SMBC will get a giant foothold in India’s banking sector, and YES Financial institution will get the backing of a robust shareholder.
Trump’s Playing cards
Speaking concerning the altering colors, metaphorically talking, US President Donald Trump stated this week that India had provided a commerce deal that proposed zero tariffs on American imports.
“It is rather onerous to promote in India, and they’re providing us a deal the place principally they’re prepared to actually cost us no tariffs,” Trump stated within the Qatari capital Doha throughout his go to to the Center East.
Trump has been placing strain on India to cut back import duties even earlier than he was reelected as president in November final yr and even referred to as the nation a “tariff abuser”. Final month, Trump imposed a 26% reciprocal tariff on imports from India along with the ten% baseline tariffs imposed earlier. These had been a part of his broader technique the place he levied baseline and reciprocal tariffs on all of America’s buying and selling companions on April 2, earlier than hitting a pause on April 9.
India, like different nations, now has 90 days to sew a commerce take care of the US. India-US commerce totalled about $129 billion in 2024, with India working a big surplus. Whereas the Indian authorities hasn’t but commented on an settlement, Trump’s assertion—if true—would mark a dramatic change in bilateral commerce ties.
Trump didn’t simply cease at commerce. He additionally chided Apple Inc for rising iPhone manufacturing in India and stated the Tim Cook dinner-led American firm ought to make extra smartphones in its house nation.
Apple has shifted a few of its manufacturing from China to India and just lately stated it would make most of its iPhones offered within the US at Indian factories as a part of a technique to defend itself from doubtlessly larger tariffs in China.
In truth, Apple’s rising manufacturing presence in India has been one of many uncommon success tales for the nation. And it might be huge loss for India if the corporate had been to now change its plans underneath Trump’s strain.
Extra Fee Cuts in Offing
Shifting on to financial information, retail inflation in India cooled to a six-year low of three.16% in April, largely as a result of a pointy drop in meals costs. Core inflation, which excludes unstable elements like meals and gasoline, additionally remained regular at 4.1%.
Greens and pulses had been the important thing drivers pulling inflation down. Their decline introduced meals inflation all the way down to 1.78% in April from 2.69% in March—the bottom degree since October 2021.
Most specialists imagine inflation will stay benign via the remainder of the calendar yr, primarily supported by subdued meals costs. The one upward strain may come from gold, which has hit report highs amid geopolitical uncertainty. Nevertheless, this turmoil—triggered by Trump’s reciprocal tariff regime—can be anticipated to have a deflationary impact on different commodities, particularly crude oil.
This could assist preserve inflation beneath 4%, the RBI’s medium-term goal, offering the central financial institution ample room for deeper charge cuts. The RBI had lowered the repo charge by 25 foundation factors every in February and April. Since then, inflation has eased additional, and progress pressures have change into extra seen—simply because the RBI had projected.
The central financial institution has shifted its coverage stance to “accommodative” and has been injecting liquidity aggressively, sustaining surplus situations within the system. With banks flush with funds, there may be little excuse left to delay passing on charge cuts. In truth, there may be rising chatter about banks frontloading charge transmission, as high-frequency indicators more and more sign the necessity to help progress.
This was the final inflation print earlier than the subsequent assembly of the Financial Coverage Committee (MPC) in June, through which a charge lower is extensively anticipated. Whether or not will probably be a 25-bps lower or a 50-bps one is now the one query left.
Market Wrap
Benchmark Indian indices rose this week as buyers welcomed a ceasefire with Pakistan and Trump’s feedback on a attainable commerce take care of India. Expectations of a charge lower after inflation cooled additionally helped enhance sentiment.
The Nifty 50 surged 4.2% for the week whereas the BSE Sensex gained 3.6%. The small-cap index soared 9.2% whereas mid-cap shares surged 7.2% this week. The IT index jumped 5.8%, as issues over a recession within the US abated.
Solely three of the 30 Sensex and the 50 Nifty shares ended within the pink. These had been IndusInd Financial institution, Bharti Airtel and Solar Pharma. IndusInd dropped because it disclosed extra accounting points whereas Airtel slipped after Singapore Telecom offered a 1.2% stake within the firm for about $1.54 billion. Solar Pharma fell on worries about US tariffs.
State-run Bharat Electronics was the highest gainer this week, surging 15% as buyers lapped up shares with publicity to the defence trade. Adani Enterprises was the subsequent greatest performer. As many as eight firms, together with Hero MotoCorp, Bajaj Auto, Jio Monetary, Tata Metal and Trent, jumped between 8% and 12%.
Virtually 15 Nifty firms, together with index heavyweight Reliance Industries, recorded a acquire of between 5% and eight%. This set additionally included Grasim, Adani Ports and IT firms Infosys, Wipro and HCL Applied sciences.
Earnings snapshot
- Bharti Airtel revenue earlier than distinctive gadgets jumps 77% to Rs 5,223 crore
- Cipla consolidated web revenue rises 30% to Rs 1,222 crore, beats estimates
- Tata Motors consolidated web revenue slumps 51% to Rs 8,470 crore however tops expectations
- Hero MotoCorp revenue up 6.4% at Rs 1,081 crore
- Tata Metal consolidated web revenue greater than doubles to Rs 1,301 crore, exceeds estimates
- Tata Energy consolidated web revenue climbs 16.5% to Rs 1,043 crore
- JSW Power consolidated web revenue up 16.1% at Rs 408 crore
- Muthoot Finance revenue grows 22% to Rs 1,444 crore
- Royal Enfield bike maker Eicher’s revenue revs up 27% to Rs 1,362 crore
- Shree Cement web revenue drops 16% to Rs 556 crore
- Jockey India licensee Web page Industries’ revenue jumps 51.6% to Rs 164 crore, tops forecasts
- Hindustan Aeronautics consolidated revenue falls 8% to Rs 3,977 crore
Different headlines
- Singapore Telecom sells 1.2% stake in Bharti Airtel for $1.54 billion
- India’s commerce deficit widens to $26.42 billion in April from $21.54 billion in March as exports fall
- India’s unemployment charge for ages 15 and above at 5.1% in April: Govt information
- Fugitive Nirav Modi asks London court docket for bail pending extradition from UK to India
- Chivas Regal maker Pernod Ricard loses bid for New Delhi licence once more
- Automobile gross sales to sellers rise practically 4% in April to 348,847 models, reveals SIAM information
- IREDA information chapter case in opposition to Gensol Engineering in NCLT amid fraud allegations
- Govt okays semiconductor JV between HCL Group and Taiwan’s Foxconn
- MSCI provides Coromandel Worldwide, Nykaa to International Commonplace index
- IT agency LTIMindtree lands its largest ever contract price $450 million
That’s all for this week. Till subsequent week, pleased investing.
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