Asian Paints Ltd. on Tuesday reported a 23% fall in profit at Rs 1,110 crore in the third quarter of this financial year. However, the profit met estimates.
Its revenue from operations fell to Rs 8,549 crore, as compared with Rs 9,103 crore during the same quarter last year.
Margins contracted due to inferior product mix and increased sales and distribution expenses.
Asian Paints Q3 Results Highlights (Consolidated, YoY):
Revenue fell 6.1% to Rs 8,549 crore versus Rs 9,103 crore (Bloomberg estimate: Rs 8,903 crore).
Ebitda down 20.4% to Rs 1,637 crore versus Rs 2,056 crore (Bloomberg estimate: Rs 1,628 crore).
Margins contracted to 19.1% from 22.6% (Bloomberg estimate: 18.3%).
Net profit fell 23.3% to Rs 1,110 crore versus Rs 1,448 crore (Bloomberg estimate: Rs 1,144 crore).
Home décor business showed a mixed performance with progress in network expansion. The bath fittings segment reported a sales increase of 2.6%, while the kitchen business saw a rise of 2.7%. On the other hand, White Teak and Weatherseal experienced a notable decline, with sales dropping by 22.8%. Asian Paints PPG's sales remained relatively flat at Rs 287.30 crore compared to Rs 288 crore in the previous period, while PPG Asian Paints reported a sales growth of 5.9%.
In the December quarter, Asian Paint's international business witnessed a significant sales increase of 17.1% in constant currency terms, complemented by a 5% rise in revenues. This growth was further bolstered by the Industrial Business, which saw a 3.8% increase driven by the general industrial and refinish segments. However, margins were impacted due to an inferior product mix and heightened sales and distribution expenses. Additionally, volume growth was affected by weak festive season demand.
The management remains cautiously optimistic on near-term recovery in demand conditions, while it continues to invest behind brands, said Morgan Stanley in a note post results announcement. Operating margins on an annual basis were affected by an adverse mix along with increased sales and distribution expenses, it further read.
While margins can be better, we would be focussed on volumes growth recovery, the brokerage said.
Share price of Asian Paints rose over 5% on Tuesday at Rs 2,418.60 per share.
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