Asian Paints Q4 Results: Profit Up 45%, Margin Expands On Falling Input Costs

Asian Paints Ltd.'s fourth-quarter profit rose beating analysts' estimates, led by decorative paints and non-automotive industrial businesses, while margins continued to expand as it benefitted from softening raw material costs.

India's largest paint maker's consolidated net profit attributable to shareholders rose 45% year-on-year to Rs 1,234.14 crore in the March quarter, according to an exchange filing. That compares with the Rs 1,136.19-crore consensus forecast of analysts tracked by Bloomberg.

• Revenue rose 11% to Rs 8,787.34 crore. (Bloomberg estimate: Rs 8,739.29).

• Operating profit rose 29% to Rs 1,864.76 crore. (Bloomberg estimate: Rs 1,699.1).

• Margins expanded to 21.2% from 18.3%. (Bloomberg estimate: 19.4%).

• Cost of materials consumed eased 4.7% to Rs 3,979.34 crore.

• International sales decreased 2.7% to Rs 794.4 crore on the back of economic uncertainty, forex crisis and liquidity issues in key markets of Asia and Africa.

• Volume growth stood at 16%, the highest in the last three quarters.

For the full fiscal, the company reported a 35% jump in net profit to Rs 4,106.45 crore. Its net sales increased 18.5% to Rs 34,488.59 crore.

“It has been an outstanding year for us with a 14% volume growth and 20% value growth in our standalone business," said Amit Syngle, managing director and chief executive officer of Asian Paints Ltd.

The industrial coatings business has recorded a "stellar growth" during the year, growing double digits in volume and value while clocking one of the highest profits in the last two decades, said Syngle.

In the fourth quarter, the company has logged the highest value ever, with the decorative and non-automotive businesses registering "double-digit" volume and value growth, according to Syngle.

Margin improved on a sequential basis and over the last year as the company worked on formulation and sourcing efficiencies besides being aided by easing raw material prices, he said. Calibrated price hikes also resulted in gross margins improving 390 basis points over the previous quarter.

In the home decor segment, the new categories of fabrics, decorative lighting, uPVC doors and windows did well while kitchen and bath were sluggish, the company said. Bath fittings business sales were down 10% to Rs 96 crore due to subdued retail demand. The kitchen business also reported a 21% decline in sales to Rs 98 crore, again dragged by weak retail demand.

Going forward, Syngle said, the paint maker remains committed to its home decor business, contributing 8-10% of the decorative business by FY26.

The non-automotive industrial business grew 17.2% to Rs 289.6 crore during the quarter. The business grew 28.4% during the year to cross the Rs 1000 crore-revenue mark.

Asian Paints' board has also recommended a final dividend payout of Rs 21.25 per equity share for the last financial year. It is subject to the approval of the shareholders.

Shares of Asian Paints were trading 2.84% higher as of 2.41 p.m. after the results were announced, compared with a flat S&P BSE Sensex.