Asian Paints Q2 Results: Profit Dips 44% Misses Estimates On All Fronts
Asian Paints Ltd.'s second-quarter profit fell 44% from a year ago to Rs 694 crore. Analysts polled by Bloomberg had estimated a net profit of Rs 1,079 crore.
The company reported a one off exceptional item of Rs. 180 crore during the quarter. This was due to an impairment loss of Rs 124 crore in subsidiaries and a foreign exchange loss of Rs 56 crore in Kadisco Paint and Adhesive Industry Share Company due to liberalisation of foreign exchange market in Ethiopia. Excluding the exceptional loss, net profit would have fallen by 25%.
India's largest paint maker saw a 5% dip in consolidated revenue year-on-year to Rs 8,028 crore in the quarter-ended September, according to an exchange filing. That compares with the Rs 8581-crore consensus forecast of analysts tracked by Bloomberg.
Asian Paints Q2 Results Highlights (Consolidated, YoY)
Revenue down 5.3% to Rs 8,028 crore versus Rs 8,479 crore (Bloomberg estimate: Rs 8,581crore).
Ebitda down 28% to Rs 1,240 crore versus Rs 1,716 crore (Bloomberg estimate: Rs 1,565 crore).
Margins at 15.4% versus 20.2% (Bloomberg estimate: 18.2%).
Net Profit down 44% at Rs 694 crore versus Rs.1232 crore (Bloomberg estimate: Rs 1,079 crore).
Segmental Performance
In Q2 FY25, Asian Paints' international business faced headwinds, reporting a 0.7% decline in sales to Rs 769.5 crore. This was largely due to macroeconomic challenges and currency devaluation in key markets, including Ethiopia, Egypt, and Bangladesh.
However, in constant currency terms, the international segment saw an 8.7% sales growth.
The home decor segment showed positive momentum across categories. The bath fittings business experienced a 2.1% rise in sales to Rs 83.1 crores from Rs 81.4 crore, while the kitchen business saw a strong 8.8% growth, reaching Rs 105.3 crore.
Additionally, White Teak and Weatherseal, part of the company's diversified offerings, achieved double-digit and moderate sales growth, with White Teak's sales up by 19.2% to Rs 31.1 crore and Weatherseal increasing by 4.8% to Rs 13.2 crore.
The Industrial segment recorded steady gains in both APPPG and PPGAP units. Sales in the APPPG business rose by 6% to Rs 265.5 crore from Rs 250.6 crore, while PPGAP reported a 5.9% increase to Rs 524.4 crore from Rs 495.3 crore.
Amit Syngle, managing director & CEO of Asian Paints Limited, stated, “The paint industry faced a subdued demand environment during the quarter. On the margin front, soft demand conditions, product mix and material price inflation affected margins in Q2."
"We expect margins to recover in the coming quarters on the back of anticipated softening in material prices coupled with price increases implemented in the last few months."
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