Asian Paints Ltd., the largest paints company in India reported a volume growth of 10% for its decorative business. This was the upper end of the CNBC-TV18 poll estimate of 8% to 10% growth. However, the stock declined as much as 4% as most of the other parameters were a miss compared to estimates.
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Revenue for the quarter stood at ₹8,731 crore, which was a decline of 0.6% compared to the year-ago quarter. The figure was also lower compared to the estimate of ₹9,050 crore.
The company attributed the decline in revenue to weak demand conditions and downtrading seen in the premium segment. Downtrading essentially refers to a customer switching from expensive to more cheaper alternatives.
However, MD & CEO Amit Syngle said that the company is confident of a pick up in demand conditions with a favourable monsoon forecast.
Net profit for the quarter stood at ₹1,275 crore, which was also lower than the CNBC-TV18 poll of ₹1,370 crore.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter also missed the ₹1,950 crore estimate, coming in at ₹1,692 crore. On a year-on-year basis, Asian Paints reported a 9.3% drop in its EBITDA.
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EBITDA margin narrowed by 170 basis points during the quarter to 19.4%, well below the 21.5% estimate.
Coatings business in India also reported a revenue decline of 0.7% during the March quarter. However, the Automotive coatings business crossed ₹2,000 crore in revenue during financial year 2024.
International business for Asian Paints saw steady growth in the Middle Eastern and African markets but remained constrained by macro-economic headwinds in South Asia and Egypt, the company said.
Here’s how the other segments fared for Asian Paints during the quarter:
Bath Fittings business sales down 8% during the quarter to ₹88.7 crore. For the full year, sales fell 16.2%.
Kitchen business sales increased by 2.8% for the quarter to ₹100.7 crore but fell 7.5% for the full year.
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White Teak and Weatherseal sales grew by 33.3% to ₹47.7 crore.
Shares of Asian Paints are trading 2% lower at ₹2,786.40. The stock is down 8.5% over the last 12 months.
