Asian Paints on Saturday reported that its consolidated net profit for the quarter ended September 2024 fell 42.4% year-on-year (YoY) to Rs 694.6 crore vs Rs 1,205.4 crore posted in the corresponding quarter of the previous fiscal year amid muted consumer sentiments.
The profit figure was lower than the ET Now poll estimate of Rs 1,079 crore.
In Q2, Asian Paints recorded a 5.3% drop in its consolidated net sales to Rs 8,003 crore from Rs 8,451.9 crore in Q2 of FY24. The revenue figure was also short of market expectations of Rs 8,581 crore.
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EBITDA fell 27.8% to Rs 1,239.5 crore from Rs 1,716.2 crore while the margin fell 480 bps to 15.5% on a YoY basis.
Asian Paints also announced an interim dividend of Rs 4.25 for FY25. The record date to determine the entitlement of shareholders for interim dividend has been fixed as 19th November and the dividend will be paid to the shareholders on or after 28th November 2024.
The company’s domestic decorative business segment registered a volume decline of 0.5% with a revenue drop of 6.7% as weak consumer sentiments coupled with persistent rainfall through the quarter and floods in some parts of the country impacted consumption.
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Revenues were affected by price cuts taken last year, a shift in mix and increased rebates, the company said, adding that the impact of price increases implemented during Q2 is expected to flow through in the 2nd half of the year.
The industrial business segment registered decent growth supported by the General Industrial, Protective Coatings and Refinish segments.
The international business registered a marginal value decline despite some challenging market conditions in Ethiopia and Bangladesh. Though on a constant currency basis, the international portfolio delivered revenue growth of 8.7% for the quarter.
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Pointing out a subdued demand environment during the quarter, Asian Paints MD and CEO Amit Syngle said operating margins were impacted by the price reductions taken last year, higher material prices and increased sales expenses.
“On the margin front, soft demand conditions, product mix and material price inflation affected margins in Q2. We expect margins to recover in the coming quarters on the back of anticipated softening in material prices coupled with price increases implemented in the last few months,” Syngle said.
In the home decor business, bath fittings recorded a sales increase of 2.1% YoY to Rs 83.1 crore while EBITDA loss increased to Rs 5.8 crore vs 2.1 crore in Q2 of FY24.
The kitchen business saw sales rise by 8.8% to Rs 105.3 crore. It also recorded an EBITDA loss of Rs 10 lakh in Q2 FY25 as against a profit of Rs 90 lakh in the corresponding period of the previous year.
Shares of the company ended 2.61% lower at Rs 2,769 on the BSE on Friday ahead of the announcement of the quarterly numbers.
