Asian Paints Q3 Results: Profit Surges 62%, Decorative Paints Volumes Jump 30%
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.
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.