Dulux Parent Akzo Nobel Optimistic On Market Share Gain Despite Flat Q3

Akzo Nobel Ltd. will continue to focus on increasing its market share with new customer acquisition in the fourth quarter of FY25. Speaking to NDTV Profit, the company's Chairman and Managing Director, Rajiv Rajgopal, said that the paintmaker has made a good start to Q4 in January and the signs look promising.

The company, which markets its product under the Dulux brand, posted a 5% decline in the net profit at Rs 109 crore for the third quarter of FY25 in comparison to Rs 114 crore in the year-ago period. Revenue growth also remained on the slower side, rising during the period under review. The company's Q3 revenues stood at Rs 1,050.5 crore in comparison to Rs 1,033 crore.

Speaking about the Q3 performance, Rajgopal mentioned that earnings have been lower than expectations. “The earnings (Q3) have been lower than what we expected as far as the topline is concerned. We expected a mid-single-digit growth but we ended up with a 2% growth rate," he told NDTV Profit.

Despite the revenue showing a flatter trend, Rajgopal said there were a couple of positive signs during the quarter with higher volume growth.

"Our coating vertical grew in terms of volume at around mid-single-digit rate. Our paint verticals also registered volume growth," he said.

According to Rajgopal, the Dulux paintmaker's profit during Q3 was also impacted by the one-time special dividend announced by the company.

“We had given a one-time special dividend commemorating 70 years of the company in India in November and as a result, there is a slight drop in the interest income, which impacts the profit. We believe as far as January is concerned, we are poised to continue our market share gain, which we have been doing over the past nine to 12 quarters,” he said.

While Rajiv Rajgopal did not divulge the absolute volume growth numbers in Q3, he mentioned that the company saw mid-single-digit growth.

On being asked about the impact of new market entrant Birla Opus on Akzo Nobel's business, the top executive said he saw a comparatively lower effect than peers as his company is more focused on premium products. "We are largely a premium product player with 16% market share, whereas Birla Opus is largely focused on mass economy products."

Rajgopal did acknowledge Birla Opus' growing size. "Initial placement (of Birla Opus) has been very strong. It would be naive for me to say that there's no impact but we are managing it very well. The fact that you can see our result, and you would see it as the industry results come up in the next few days, has been ahead, clearly demonstrates that our product quality is our USP and is unmatched," he mentioned.

Shares of paintmaker Akzo Nobel were trading 2.72% lower at Rs 3,378.95 apiece as of 1:50 p.m., in comparison to the benchmark Nifty 50's decline of 0.11% to 23,045.60 points.