Asian Paints Ltd.’s net profit rose for the third straight quarter but missed analyst estimates.
The paint maker’s bottom line increased 4 percent year-on-year to Rs 481 crore in the quarter ended March, the paint maker said in its filings to the stock exchanges. That compared to Rs 542 crore estimated by analysts tracked by Bloomberg. The bottom line was hit by a high tax outgo and lower other income, which almost halved to Rs 39 crore from last year.
Revenue rose 15 percent on a yearly basis to Rs 4,483 crore in the same period, matching estimates. Revenue from the paint business rose 2.6 percent to Rs 4,395 crore as compared to the same period last year, while the home improvement business revenue increased 11.4 percent to Rs 98 crore in the same period.
International markets such as Nepal, Bangladesh and Oman witnessed good top line growth, Asian Paints said. The performance was, however, impacted by “unfavorable demand conditions, issues around availability of forex in certain key units alongside increasing input price pressures”, according to Managing Director and CEO KBS Anand.
The operating performance too was in line with expectations. Earnings before interest, tax, depreciation and amortisation rose 18.5 percent to Rs 839 crore while the operating margin expanded 60 basis points to 18.7 percent. The company said continued rise in raw prices continued kept margins under pressure which was partially offset by price hikes undertaken in the quarter.
The key decorative paints business registered double-digit volume growth, Asian Paints said in a press release accompanying the earnings filing.
- Raw material cost went up by 11.4 percent to Rs 2,311 crore.
- Effective tax rate widened 500 basis points to 36.7 percent.
- Management seeing good demand conditions in auto and industrial paint segment
Ahead of the earnings announcement, shares fell 0.64 percent to Rs 1,214 apiece.