Asian Paints' net profit fell 24.5% in the quarter ending June. The country's largest paint manufacturer saw its profits decline to Rs 1,170 crore, while its decorative paints division (India) volumes increased by 7%. During the quarter, the company's net sales were Rs 8,970 crore, a 2.3% decrease due to weak market circumstances caused by the general elections and severe heat waves. The company also stated that the quarter's sales growth was impacted by price cuts enacted in the previous quarter and a change in mix.
Asian Paints Limited
The paint major's profit before interest, depreciation, and tax fell 19.7 percent to Rs 1,887 crore in the June quarter.
In the April-June quarter, Asian Paints reported that geographies such as Ethiopia and Sri Lanka expanded strongly due to a gradual recovery in these economies, while macroeconomic challenges persisted in major countries such as Nepal, Bangladesh, and Egypt, affecting total international business performance.
“The paint sector faced adverse demand circumstances due to the severe temperatures and general elections in the quarter. We delivered a good volume rise of 7% in the decorative area, boosted by some movement in rural markets; nevertheless, value decreased by 3%, influenced by the price cut made earlier in the year and a shift in product mix,” Amit Syngle, Managing Director and Chief Executive Officer at Asian Paints, said in the company’s results release.
He added, “Unexpected material price escalation, combined with supply chain issues, had an impact on the ornamental business's quarterly profitability.” The industrial industry performed relatively well, growing by 5.8 percent in value, aided by strong growth in the auto OEM and powder coating segments.
Syngle also noted, “Its economy section experienced strong demand, supported by the debut of our breakthrough latex paint NeoBharat, which is part of our targeted approach to making additional inroads in the 'bottom of the pyramid' segment.”
He also stated that the company had a positive quarter in home décor, with growth across all categories and particularly in its Beautiful Home Stores. While discussing the forecast, Syngle stated, "In the near term, we expect demand conditions to improve as rural sentiment improves and monsoons gradually ramp up. We remain committed to generating growth through increased brand awareness, innovation, and client centricity."
