Asian Paints Q1 results: Net profit jumps 52.5% to Rs 1,550 crore, beats analysts' estimates

Asian Paints on Tuesday reported a consolidated net profit of Rs 1,550.4 crore for the quarter ended June, beating analysts' estimates. The net profit saw an increase of 52.5 per cent compared with the corresponding period a year ago. 

The paint major's revenue from operations came in at Rs 9,182.3 crore for the first quarter of the current financial year, as against Rs 8,606.9 crore for the year-ago period, according to a regulatory filing. 

According to Zee Business research, Asian Paints was estimated to report a quarterly net profit of Rs 1,336 crore and revenue of Rs 9,340 crore.

Asian Paints' margin — a key measure of profitability — improved by 510 basis points on a year-on-year basis to 23.2 per cent. Zee Business analysts had pegged the company's margin at 21 per cent. 

“Our domestic decorative business registered double-digit volume growth and relatively healthy value growth, coming on a high base of the previous year... Our international business was supported by good deliveries from the Middle East region however, continued macroeconomic challenges and adverse forex conditions in Asian markets resulted in overall subdued growth for the international portfolio. On the home decor front, categories like fabrics, decorative lighting, UPVC doors and windows maintained their high growth trajectory. However, the kitchen and bath business segments were sluggish," said Amit Syngle, Managing Director and CEO, Asian Paints.

"Overall, we have recorded significant improvement in margins, both sequentially as well as on a year‐on‐year basis, aided by strong efforts on driving operational, formulation and sourcing efficiencies and supported by easing inflation in raw material prices. Looking ahead, we remain focused on pursuing growth and are confident about a robust festival season ahead," he added.

Sales in its international business decreased 1.4 per cent to Rs 695.1 crore on account of economic uncertainty, a forex crisis, and liquidity issues in key markets of Asia and Africa, according to a company statement. Out of its home decor business, sales in the bath fittings business decreased 28.2 per cent to Rs 84.7 crore and sales in the kitchen unit contracted 12 per cent to Rs 96 crore, it said.

Asian Paints shares continued to reel under selling pressure after the earnings announcement. The stock fell by as much as Rs 191.1 or 5.4 per cent to Rs 3,351 apiece on BSE in intraday trade.   

The Asian Paints scrip finished the June quarter with a gain of 21.7 per cent, sharply outperforming a 10.5 per cent rise in the benchmark Nifty index.

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