Asian Paints Q3 Results: Profit Surges 62%, Decorative Paints Volumes Jump 30%
Net profit of India’s largest paintmaker rose 62% to Rs 1,265.35 crore in the third quarter.
Asian Paints Ltd.’s profit beat estimates and margin expanded, aided by recovery of demand in the decorative paints business.
India’s largest paintmaker saw its net profit surge 62% year-on-year to Rs 1,265.35 crore in the October-December period, according to an exchange filing. That compares with the Rs 971-crore consensus forecast of analysts tracked by Bloomberg.
Highlights (year-on-year)
Revenue rose 25% to Rs 6,788.47 crore—against an estimated Rs 6,029.2 crore.
Operating profit rose 50% to Rs 1,787.89 crore.
Margin expanded to 26.3% from 21.9%.
The company’s domestic decorative business delivered more than 30% volume growth, led by premium and luxury portfolios, Amit Syngle, managing director and chief executive officer, said in the filing.
“Demand conditions continued to exhibit a strong recovery across business segments, spread over most regions in the third quarter of this financial year,” Syngle said, adding the company’s foray into home décor got a big fillip from a “strong performance of the home improvement business”.
Revenue from Asian Paints’ home improvement category rose 21.6% year-on-year to Rs 153.39 crore in the three months ended December, while that from the paints segment—both decorative and industrial—increased 25.3% over the year-earlier to Rs 6,635.08 crore.
“The industrial coatings business delivered a robust performance, particularly in protective coatings and auto businesses, benefited by a resurgence in the industrial activity,” Syngle said. “Profitability across businesses has been well supported by a good sales mix and cost optimisation and sourcing measures pursued strongly through innovation programmes.”
Asian Paints’ international business also recorded double-digit volume growth, led by Asia and the Middle East.
The company expects demand to remain strong in January-March quarter and the rollout of Covid vaccination program augurs well for recovery, Syngle said in a conference all after the earnings were announced. But the company remains cautious and any potential surge in virus cases is a concern.
The cost of raw material will decide price hikes and India's largest paintmaker will continue to cut costs and will only take up business-critical spending, he said.
Shares of Asian Paints ended 1.6% higher compared with a 0.4% decline in Nifty 50.