Consumers Shed ‘Paranoia’, Back To Spending Again, Says Asian Paints CEO

India’s biggest paintmaker said demand is rising every month as Indians have started to spend again.

“There has been a sequential demand increase (July-August-September), which is very encouraging. We are definitely seeing positivity in the environment,” Amit Syngle, managing director and chief executive officer at Asian Paints Ltd., told Bloomberg Quint in an interview. “The paranoia seems to be going away...and the consumer is preferring to spend.”

There is an impetus from the festive demand as well, he said. “We are seeing this trend continue in October as well."

India imposed one of the world’s strictest coronavirus lockdown in late March that caused the economy to contract by nearly 24% in the three months ended June. Job losses and salary cuts hurt consumer sentiment and the GDP is on track for its first full-fiscal contraction in decades. The economy, however, is slowly recovering from the disruption.

A healthy monsoon and strong agrarian economy aided demand in Tier III and IV cities and rural regions, Syngle said, adding that it’s also improving month-on-month in the metros.

That aided the company’s product mix as economy, premium and luxury paint categories grew. As large portion of the premium and luxury paint sales take place in metros, and the product mix too has seen an improvement, Syngle said.

Meanwhile, brokerages raised target price for the stock citing the improved second-quarter earnings. Shares of Asian Paints were trading nearly 1% higher at 2:20 in Mumbai compared with a 0.3% gain in the Nifty 50 Index.