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Asian Paints saw its net profit down 24.5 per cent in the quarter ended June. The country’s largest paint maker saw its profits fall to Rs 1,170 crore, and its decorative paints business (India) volumes stood at 7 per cent.
During the quarter, the company’s net sales stood at Rs 8,970 crore and were down 2.3 per cent due to weak demand conditions, which the company attributed to the general elections and severe heat waves.
The company also said that the quarter’s revenue growth was affected on account of price cuts implemented in the previous quarter and a shift in mix.
The paint major’s profit before interest, depreciation, and tax was down 19.7 per cent to Rs 1,887 crore in the quarter ended June.
In the April-June quarter, Asian Paints said that geographies like Ethiopia and Sri Lanka grew well on the back of a gradual recovery in these economies, while macroeconomic issues persisted in key markets like Nepal, Bangladesh, and Egypt, impacting the overall international business performance.
“Demand conditions for the paint industry were tough, impacted by the severe heatwave and general elections in the quarter. We delivered a good volume growth of 7 per cent in the decorative segment aided by some movement in rural markets; however, value declined by 3 per cent, impacted by the price decrease taken earlier in the year and a shift in product mix,” Amit Syngle, managing director and chief executive officer at Asian Paints, said in the company’s results release.
He added, “Unanticipated material price inflation coupled with supply chain challenges impacted the profitability of the decorative business for the quarter.”
The industrial business did relatively better and grew by 5.8 per cent by value, backed by good growth in the Auto OEM and powder coatings segment.
Its economy segment saw a good offtake aided by the launch of our revolutionary latex paint NeoBharat, which is part of our focused approach to make further inroads in the ‘bottom of the pyramid’ segment, Syngle added.
He also said that the company saw a progressive quarter in home décor, with growth in all the categories and strong growth in its Beautiful Home Stores.
While talking about the outlook, Syngle said, “In the near term, we expect demand conditions to improve on the back of improving rural sentiment and monsoons picking up gradually. We remain focused on driving growth through enhanced saliency of our brand, innovation, and customer centricity.”
First Published: Jul 17 2024 | 3:22 PM IST
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