Q1 Results: Asian Paints’ Profit Beats Estimates
Asian Paints’ Q1 profit jumps 31 percent.
Asian Paints Ltd.’s profit rose for the fourth straight quarter, surpassing street estimates.
The paintmaker’s net profit increased 31 percent year-on-year to Rs 558 crore in the quarter ended June, it said in an exchange filing. That’s higher than Rs 517 crore estimated by analysts tracked by Bloomberg.
Revenue rose 15 percent on a yearly basis to Rs 4,391 crore compared with the Rs 4,433-crore estimate. Revenue from the paints business rose 15 percent year-on-year to Rs 4,307.6 crore, while home improvement business sales jumped 44.4 percent to Rs 90.9 crore.
The operational performance was also better than expected. Earnings before interest, tax, depreciation and amortisation rose 32 percent to Rs 875.5 crore while the operating margin expanded 250 basis points to 19.9 percent.
- Raw material cost rose 14 percent to Rs 2,429.5 crore.
- Raw material cost to net sales ratio stood at 55.2 percent.
- Gross margins fell to 43.3 percent from 48.4 percent last year.
GST Rate Cuts
The GST Council’s decision to reduce taxes on decorative paints from 28 percent to 18 percent is a “welcome move”, and should help improve demand from small consumers, Managing Director and Chief Executive Officer KBS Anand said in a press release accompanying the filing.
We have taking steps to pass on the rate cut benefit to the consumers, however, we are seeing a continuous increase in raw material prices and expect an inflation of almost 10 percent in the second quarter.KBS Anand, CEO, Asian Paints
Paints were among the more than 50 goods, including washing machines and refrigerators, for which rates have been lowered effective July 27.