Asian Paints Weathers Demonetisation Storm In Third Quarter
Asian Paints Ltd. registered a 1.5 percent growth in net profit.
Asian Paints Ltd. registered a 1.5 percent growth in net profit for the October to December quarter in financial year 2016-17, largely in-line with street estimates.
Net profit increased to Rs 489.3 crore from Rs 482.2 crore in the same quarter last year, according to the company’s filing to the exchanges. Analysts tracked by Bloomberg had pegged the bottom line at Rs 491 crore. Total expenses went up 3.8 percent year-on-year to Rs 3,663 crore. Tax expenses also went up to Rs 246.5 crore against Rs 227.4 crore in the third quarter, last year.
The paint manufacturer’s revenue rose 2.6 percent to Rs 4,354 crore on a year-on-year basis, beating the analysts’ estimate tracked by Bloomberg at Rs 4,036 crore.
Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 1.2 percent to Rs 776.3 crore. EBITDA margin contracted 70 basis points to 17.8 percent.
KBS Anand, the chief executive officer of Asian Paints had earlier said that the company’s margins were expected to take a hit due to the rise in cost of raw materials. “Margins at the moment are reducing. Depending on the demand situation and how we see it going forward, automatically we’ll correct margins to the extent we can,” Anand said in an interview to BloombergQuint at the World Economic Forum (WEF) in Davos.
Asian Paints spent Rs 1,912.4 crore on raw materials in the third quarter, which was 1.6 percent higher than the corresponding quarter of the previous year.
The paint manufacturer’s inventory stock reduced 52.3 percent from last year, and stood at Rs 59.94 crore at the end of the third quarter.