Asian Paints Ltd.'s first-quarter profit fell, with revenues declining on account of a high base, price cuts and subdued demand.
India's largest paintmaker saw a 24.6% dip in consolidated net profit year-on-year to Rs 1,187 crore in the quarter-ended June, according to an exchange filing. That compares with the Rs 1,407.3-crore consensus forecast of analysts tracked by Bloomberg.
Asian Paints Q1 FY25 Highlights (Consolidated, YoY)Revenue fell 2% to Rs 8,969 crore (Bloomberg estimate: Rs 9,318.4 crore).
Operating profit declined 20% to Rs 1,694 crore (Bloomberg estimate: Rs 1,965.4 crore).
Margin shrank to 18.9% from 23.1% (Bloomberg estimate: 21.1%).
The domestic decorative business experienced 7% volume growth, aided by an uptick in rural demand. However, the value growth fell 3%, impacted by the price cuts taken earlier in the year and a shift in the product mix.
"Demand conditions for the paint industry were tough, impacted by the severe heatwave and general elections in the quarter," said managing director and chief executive officer, Amit Syngle. Unanticipated material price inflation coupled with supply chain challenges impacted the profitability of the decorative business for the quarter, he added.
The industrial business did relatively well and grew 5.8% by value, led by good growth in the auto OEM and powder coatings segments.
The economy segment saw a good offtake, aided by the launch of our revolutionary latex paint NeoBharat, Syngle said. NeoBharat was launched in April this year as part of the company's focused approach to making further inroads in the ‘bottom of the pyramid' segment.
On the international front, geographies like Ethiopia and Sri Lanka grew well in Q1 on the back of a gradual recovery in these economies; however, key macroeconomic issues persisted in markets like Nepal, Bangladesh and Egypt, impacting the overall performance of the segment, according to the company.
"In the near term, we expect demand conditions to improve on the back of improving rural sentiment and monsoons picking up gradually," Syngle said.
Shares of Asian Paints were trading 0.56% higher on Friday, as compared to flat benchmark S&P BSE Sensex. The results were declared on a market holiday.
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