Higher costs take colour off Asian Paints

Muted volume growth accompanied by rise in raw material costs; longer term prospects remain healthy

The Asian Paints stock shed 1.4 per cent on lower than estimated June quarter results. Weighed down by a fall in volumes and higher raw material costs, the company disappointed the Street on all counts.

Volumes in the quarter were up only two per cent year-on-year, as estimated by analysts (the company does not disclose volume numbers), on the back of destocking of inventory at dealers, prior to implementation of the goods and service tax (GST). Analysts say volume growth was lower than in the December 2016 quarter, which was impacted by the note ban. This and a three per