Asian Paints extends fall on weak Q1 earnings

The operating profit margin fell by 156 bp to 15.7% on yoy basis

Asian Paints has trading lower by 3% at Rs 4,933, extending its previous day’s 2% fall, after reporting a 4.5% year-on-year (yoy) drop in consolidated net profit at Rs 283 crore for the quarter ended June 30, 2013 due to higher other expenditure and staff cost.

Analyst on an average had expected profit of Rs 311 crore from the India’s largest paint maker.

The company’s other expenditure increased by 23% yoy to Rs 562 crore mainly on account of expenses incurred towards commissioning of a new plant at Khandala (Maharashtra). EBITDA or operating margin fell by 156 bp to 15.7% on yoy basis.

“The company’s decorative paints business in India continued to perform well with paints volume growing by double digits. However, industrial paints and automotive coatings businesses continued to be affected by economic slowdown,” Asian Paints said in a press release.

The stock opened at Rs 5,024 and touched low of Rs 4,916 on NSE. A combined around 175,800 shares changed hands on the counter so far.