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Informist, Thursday, May 8, 2025

 

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--Jan-Mar consol net profit INR 6.92 bln vs INR 12.57 bln
--Analysts saw Asian Paints Jan-Mar consol net profit INR 10.62 bln
--Jan-Mar consol revenue INR 83.59 bln vs INR 87.31 bln year ago
--To pay INR 20.55 per share final dividend
--FY25 consol net profit INR 36.67 bln vs INR 54.60 bln year ago
--FY25 consol revenue INR 339.06 bln vs INR 354.95 bln year ago
--One-time cost of INR 1.83 bln in Jan-Mar
--Jan-Mar consol EBITDA INR 14.36 bln vs INR 16.91 bln yr ago
--Jan-Mar consol EBITDA margin 17.2% vs 19.4% year ago
--Jan-Mar India decorative paints volume up 1.8% on year
--Jan-Mar India decorative paints revenue down 5.2% on year
--Jan-Mar industrial business sales up 6.1% on year
--Jan-Mar intl business revenue up 6% in constant currency
--Jan-Mar India decorative paints sales hit due to muted demand
--Jan-Mar India decorative paints sales hit due to downtrading
--Jan-Mar India decorative paints sales hit on high competition
--Industrial sales up on rise in general industrial, auto ops
--Intl ops faced headwinds from macro challenges in Africa
 

 

By Narayana Krishna

 

HYDERABAD – Increased competition, slackening demand, and a fall in domestic decorative paints sales dragged down Asian Paints Ltd.'s earnings for the March quarter. The company Thursday reported a consolidated net profit of INR 6.92 billion, down nearly 45% on year and way below analysts' consensus estimate of INR 10.62 billion.

 

The fall in the company's net profit is higher than in the past three quarters. Its revenue for the quarter fell 4.3% on year to INR 83.59 billion, also lower than analysts' estimate of INR 85.90 billion. Sequentially, the company's net profit was down 37.7% and the revenue was down 2.3%.

 

Reacting to the weak results, which were announced in market hours, shares of Asian Paints turned negative and closed at INR 2302.60 points on the National Stock Exchange, down 1.4% from Wednesday's close.

 

"The weak demand conditions prevalent for the past few quarters continued to affect the paint industry even in the last quarter (Jan-Mar) of the financial year," the company said in a press release quoting Managing Director and Chief Executive Officer Amit Syngle. "The demand for decorative coatings was only marginally better than in the third quarter."

 

The company said that while the macroeconomic environment remains uncertain, "we are cautiously optimistic about a recovery in demand conditions and continue to work diligently on leveraging our brand strength and driving operational efficiencies to pursue growth".

 

Besides the weak operating performance, a one-time cost of INR 1.83 billion related to impairment charges hit the earnings of Asian Paints. The company booked an impairment charge of INR 778 million on the White Teak brand, INR 215 million on Causeway Paints, Sri Lanka, and INR 837 million on two entities in Indonesia, Asian Paints said.

 

The company's domestic decorative paints business registered volume growth of 1.8% on year for the quarter, but the revenue declined 5.2% on year. Asian Paints cited high competition in the segment as one of the reasons for the fall in revenue.

 

The industrial business fared better, growing 6.1% on year, aided by growth in the general industrial and automotive coatings segments, the company said. Overall, revenues from the coatings business in India for the quarter declined 4.1% on year. The home decor business faced multiple headwinds, resulting in muted performance for the quarter.

 

In the international business segment, the company faced multiple headwinds that affected its earnings. Key markets in West Asia and rest of Asia performed well, but markets in Africa faced macroeconomic challenges. While the revenue from the segment declined 1.5% for the March quarter to nearly INR 8 billion, it rose 6% in constant currency terms, the company said. Currency devaluation in Ethiopia and Egypt also had an impact on the global business, the company said.

 

In line with its operating performance, the company's earnings before interest, tax, depreciation, and amortisation margin also fell nearly 220 basis points on year to 17.2%, while the EBITDA fell to INR 14.36 billion from INR 16.91 billion a year ago. The adverse mix and overall lower revenues hit the operating margin for the quarter on a year-on-year basis, the company said.

 

For the financial year 2024-25 (Apr-Mar), Asian Paints reported a consolidated net profit of INR 36.67 billion, down 32.8% on year, while its revenue was down 4.5% on year at INR 339.06 billion. The board of directors of the company approved the payment of a final dividend of INR 20.55 per share.  End

 

Edited by Rajeev Pai

 

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