Asian Paints, Berger Paints slip up to 4%; hit 52-week lows on weak demand

Asian Paints said decorative business revenues were 1.8 per cent lower than last year impacted by the weak demand environment and downtrading, particularly in the Premium segment.

Shares of Asian Paints and Berger Paints (India) slipped 4 per cent, hitting their respective 52-week lows on the BSE in Thursday’s intra-day trade post former's Q4 results.
 

Asian Paints dipped 4 per cent to Rs 2,722.30 after the company’s consolidated net sales decreased by 0.6 per cent to Rs 8,701.5 crore in March quarter (Q4FY24) from Rs 8,750.8 crore in Q4FY23. The stock fell below its previous low of Rs 2,766.05 touched on April 19, 2024.

The company’s net profit increased 1.8 per cent year-on-year (YoY) to Rs 1,256.70 crore from Rs 1,234.10 crore. PBDIT (profit before depreciation, interest, tax, other income, and exceptional items) (before share in profit of associates) decreased by 9.3 per cent to Rs 1,691.4 crore from Rs 1,864.8 crore. PBDIT margin contracted 190bps 19.4 per cent as compared to 21.3 per cent in the corresponding period of the previous year.

Asian Paints said decorative business volume grew at a healthy clip of 10 per cent in the fourth quarter. However, revenues were 1.8 per cent lower than last year impacted by the weak demand environment and downtrading, particularly in the Premium segment. The Economy and Luxury range though, grew well. Price cuts implemented in the last few months also affected the fourth quarter value, the company said.

Looking ahead, the management remains confident about a pick-up in demand conditions with a favorable monsoon forecast.

However, analysts expect higher competition and demand challenges will be a concern. With the entry of new players with deep pockets and massive commitments to investments, the overall industry may see a shift in market share and cost structures. These will be the key monitorables in FY25. Analysts remain cautious as the paints segment may not enjoy higher multiples of the past.

Meanwhile, shares of Berger Paints (India) hit fresh 52-week low of Rs 483.60, down 4 per cent on the BSE in intra-day trade. In past four trading days, the stock slipped 8 per cent.