NEW DELHI: While various industry majors have highlighted that inflation has dragged down demand for consumer goods, which has resulted in rural India experiencing a slowdown, Asian Paints says potential of some of the rural geographies seems strong.
Responding to a question in the company’s investor call Amit Syngle, MD & CEO, Asian Paints, said, “When you go into Tier-3 (T3), Tier-4 (T4) cities, the consumption is going up; the decor levels are going up and the purchasing capacity is going up. What we see is that the potential of some of the rural geographies is very strong, and therefore, we think that the expansion process will continue.”
Syngle said that in Q2, it was the T3, T4 cities that were performing extremely well, and they had given a very high growth number because there was still a little bit of Covid impact in the larger cities.
In Q3, the situation was reversed as the spending in metros exceeded the demand from T3, T4 cities.
“We still feel that the story, as the other companies in the industries may be feeling, for us I think that T3, T4 has been very very strong. So overall what we see is that the story of T3, T4 cities should be quite relevant,” he said.
Syngle also added that the inflationary trend will continue further. “Although the kind of rate of increase which is there would be moderate in Q4, we have just seen that the crude prices have gone up and so on and so forth. So I think the inflationary trend will continue for some time.”