India’s largest paint manufacturer Asian Paints has posted an 80.4% rise in consolidated net profit of Rs 1,036.03 crore for the first quarter ended June 30, beating street estimates, buoyant on good consumer demand. In comparison, the company had posted a net profit of Rs 574.30 crore for the same period of the previous financial year.
The company’s earnings beat the consensus estimate by Bloomberg analysts, who were expecting the firm to post a net profit of Rs 868.2 crore for the quarter.
Asian Paints’ total revenue from operations rose 55% to Rs 8,606.94 crore from Rs 5,585.36 crore recorded during the same year-ago period. The Mumbai-based company’s total expenses, including the cost of materials consumed, rose to Rs 4,610.30 crore from Rs 3,426.09 crore recorded during the same year-ago period.
“The domestic decorative business experienced good consumer demand and recorded stellar revenue growth for the quarter. The volume growth of 37% registered in the quarter is one of the highest in the last six quarters. The business also registered a robust four-year compounded growth in volume and value terms. The auto original equipment and the general industrial coatings business delivered a sturdy growth trajectory,” said Amit Syngle, managing director and chief executive officer of Asian Paints.
“We continued to make further inroads in our home décor business, proliferating its product and service offerings. The international business also delivered good double-digit revenue growth for the quarter despite multiple headwinds across key geographies. While the persistent inflationary environment continued to impact the gross margins, we delivered healthy operating margins with a strong push on the premium and luxury offerings and driving further operational efficiencies across businesses,” Syngle added.
Asian Paints’ sales for bath fittings business rose 120.1% to Rs 117.99 crore from Rs 53.61 crore in the corresponding period of the previous year. The profit before depreciation, interest, tax and other income (PBDIT) for the bath fittings business rose to Rs 4.21 crore as against a loss of Rs 1.04 crore in the last year.
Sales for its kitchen business increased 68.3% to Rs 109.04 crore from Rs 64.79 crore in the corresponding period of the previous year. PBDIT loss for kitchen business fell to Rs 4 crore from a loss of Rs 5.38 crore in the last year.
The economic crisis in Sri Lanka led to a currency devaluation resulting in an exceptional item of Rs 24.21 crore due to exchange loss for its subsidiary Causeway Paints Lanka.
On the outlook, Syngle said, inflation is a big worry but the overall industry outlook — including demand outlook and direction — seems to be “good”.
On Tuesday, shares in Asian Paints closed up 0.06% at Rs 3,107.60 on the BSE.