Disruption in operations may lead to demand uncertainty in home improvement categories: Asian Paint
Asian Paints expects an “uncertainty in demand” in the home improvement categories, including paints, on account of disruptions in operations after the second wave of the coronavirus pandemic, the company said in its latest annual report.
Besides, the country’s leading paint maker is also concerned about the inflationary pressure on the input materials in its product segments, said Asian Paints in the annual report.
“There has been a re-imposition of restrictions on business activity in many states and this has again disrupted operations of our vast supply chain network.
“This is expected to lead to uncertainty in demand in the larger home improvement categories, including paints,” said Asian Paints in its management discussion and analysis.
Though economic growth is expected to bounce back strongly in 2021-22 on global as well as domestic fronts but a lot would hinge on how the pandemic plays out, given the resurgence of the virus and the spread of infections, it added.
Over the inflation in commodity prices, Asian Paints said input materials in its product segments across geographies have risen “significantly” since the last quarter of 2020-21 and continues to be on the uptrend.
“The challenges to business posed by this inflationary pressure and the uncertain market conditions would place a strong emphasis on managing the business in a dynamic manner and altering operational priorities to suit the changing market conditions,” it said.
Asian Paints said the roll-out of the vaccination drive across the major economies, including India, in the last quarter of 2020-21 has accorded a much-needed boost to sentiments around a sustained recovery of economic activity across the globe.
“But, it will take some time to deliver results as a large cross-section of the population will need to be vaccinated before the spread of the virus can be curbed,” said Asian Paints Managing Director and CEO Amit Syngle.
The company will continue to accord the highest priority on the well-being of its employees, encouraging them to follow necessary precautions, he said.
“We will also have to anticipate intermittent business restrictions and disruptions to the supply chain networks for some time,” Syngle added.
While talking about 2020-21, he said Asian Paints not only adapted to new norms, addressing the emerging realities, but also remained in pursuit of its long-term strategic objectives that would enable it to deliver sustainable growth.
In 2020-21, Asian Paints had reported Rs 18,516.9 crore revenue from operations.
The Mumbai-based company is also present in the home improvement and decor segment and offers bath and kitchen products.
It has also introduced lightings, furnishings and furniture in its portfolio. In the health and hygiene segment, Asian Paints offers a range of sanitisers and surface disinfectants.
Asian Paints operates in 14 countries and has 26 paint manufacturing facilities in the world, servicing consumers across over 60 countries.
