Asian Paints sees 6% profit drop in Q1, strong performance in int'l markets

Asian Paints reports a 6% drop in Q1 net profit, despite a 3.9% rise in decorative paints volumes and a strong performance in international markets

Asian Paints saw its net profit fall by 6 per cent in the quarter ended June. The country’s largest paint maker reported a profit of Rs 1,100 crore, while its decorative paints business in India saw a 3.9 per cent increase in volumes.  During the quarter, the company’s net sales stood at Rs 8,939 crore, a decline of 0.3 per cent. The company stated that the industry witnessed a marginal improvement in demand from urban centres, despite the monsoons slowing momentum in June.  Sales from the Industrial Business increased by 8.4 per cent to Rs 736.1 crore, up from Rs 679.1 crore, driven by growth in the Asian markets, as well as in the UAE and Egypt, the company said in its earnings release.  Its PBIDT (profit before interest, depreciation, and tax) stood at Rs 1,854 crore, down 1.7 per cent.  “The paint industry experienced a slight uptick this quarter, driven by marginally improved demand from urban centres, despite monsoons slowing the momentum in June. Our revenues for the coatings business in India were 0.2 per cent lower than last year. The domestic decorative paints business performed relatively better compared to previous quarters, registering a volume growth of 3.9 per cent and a revenue decline of 1.2 per cent,” Amit Syngle, Managing Director and Chief Executive Officer of Asian Paints, said in the earnings release.  He added that the operating margins for the quarter were marginally lower on a year-on-year basis due to higher sales and marketing investments. The home décor business was slow due to subdued retail consumption; however, the retail chain of Beautiful Homes Stores performed well. “On the international front, the portfolio delivered a strong performance with a revenue growth of 11.1 per cent on a like-to-like basis (20.4 per cent in constant currency terms), with all key markets in the Middle East and South Asia performing well,” Syngle said.  He also expressed confidence in the long-term growth potential of the home décor and paints industry, noting that the company continues to drive innovation and strengthen its brand presence as it navigates the current demand challenges.