Asian Paints Q1 results: Net profit falls 24.5% on weak demand, price cuts

During the quarter, the company's net sales stood at Rs 8,970 crore and were down 2.3 per cent due to weak demand conditions, which the company attributed to general elections and severe heat waves

Asian Paints’ net profit fell 24.5 per cent in Q1FY25 due to weak demand owing to general elections and severe heat waves, the company said.

The country’s largest paint maker saw its profits fall to Rs 1,170 crore and its decorative paints business (India) volumes stood at 7 per cent.

During the quarter, the net sales of the country’s largest paint maker stood at Rs 8,970 crore and was down at 2.3 per cent.

The company also said that the quarter’s revenue growth was affected on account of price cuts implemented in the previous quarter and shift in mix.

The paint major’s profit before interest, depreciation and tax was down 19.7 per cent to Rs 1,887 crore in the quarter ended June.

In the April-June quarter, Asian Paints said that geographies like Ethiopia and Sri Lanka grew well on the back of gradual recovery in these economies, while macroeconomic issues persisted in key markets like Nepal, Bangladesh and Egypt, impacting the overall international business performance.

“Demand conditions for the paint industry were tough, impacted by the severe heatwave and general elections in the quarter. We delivered a good volume growth of 7 per cent in the decorative segment aided by some movement in rural markets, however, value declined by 3 per cent impacted by the price decrease taken earlier in the year and shift in product mix,” Amit Syngle, managing director and chief executive officer at Asian Paints, said in a release.

“Unanticipated material price inflation coupled with supply chain challenges impacted profitability of the decorative business for the quarter,” he added.

The Industrial business did relatively better and grew by 5.8 per cent by value backed by good growth in Auto OEM and powder coatings segment.

Its economy segment saw a good offtake aided by the launch of our revolutionary latex paint NeoBharat, which is part of our focused approach to make further inroads in the ‘bottom of the pyramid’ segment, Syngle added.

He also said that the company saw a progressive quarter in the home décor, with growth in all the categories and a strong growth in its Beautiful Home Stores.

Talking about the outlook, Syngle said, “In the near term, we expect demand conditions to improve at the back of improving rural sentiment and monsoons picking up gradually. We remain focused on driving growth through enhanced saliency of our brand, innovation and customer centricity.”