Asian Paints Q4 Results: Weak Demand Hurts Revenue, Margin Narrows
The paintmaker's consolidated net profit rose 1.34% to Rs 1,275.3 crore in the March quarter.
Asian Paints Ltd.'s consolidated net profit rose in the fourth quarter of financial year 2024, meeting analysts' estimates, even as subdued demand coupled with downtrading impacted revenue.
India's largest paintmaker's profit rose 1.3% year-on-year to Rs 1,275.3 crore in the January-March period, according to an exchange filing on Thursday. Analysts tracked by Bloomberg had a consensus estimate of Rs 1,332.8-crore.
Asian Paints Q4 Earnings Highlights (Consolidated, YoY)
Revenue fell 0.65% to Rs 8,730.8 crore (Bloomberg estimate: Rs 9,126.7 crore).
Operating profit fell 9.3% to Rs 1,691.4 crore (Bloomberg estimate: Rs 1,943.9 crore).
Margin narrows to 19.4% from 21.2% because of higher brand investments. (Bloomberg estimate: 21.3%).
The domestic decorative business of Asian Paints registered a volume growth of 10% even as revenue declined 1.8% during the quarter.
"Revenues were impacted by the weak demand environment and downtrading, particularly in the premium segment," Chief Executive Officer Amit Syngle said in a statement. The economy and luxury range though, grew well. Price cuts implemented in the last few months also affected the fourth-quarter revenues, he said.
The coatings business registered a revenue decline of 0.7% in the fourth quarter. However, the company's automotive coatings business crossed the Rs 2,000-crore revenue mark in the year.
The overseas business for Asian Paints reported sales growth of 2.3% in Q4 to Rs 812.3 crore. "Our international business has seen steady growth in the Middle Eastern and African markets but remains constrained by macro-economic headwinds in South Asia and Egypt," according to Syngle.
Despite these challenges, the profit before exceptional items in the global business grew 12% to Rs 44.2 crore in the March quarter.
The largest integrated home decor player has also been expanding store footprint and has been gaining from synergies with the Asian Paints' 'Beautiful Homes' network. "[The segment's] profits for the year have grown in strong double digits, supported by subdued material prices coupled with sourcing and formulation efficiencies," Syngle said.
Segment-Wise Performance Within Home Decor
Bath Fittings business sales down 8% during the quarter to Rs 88.7 crore. For the full fiscal year, sales fell 16.2%.
Kitchen business sales increased 2.8% in the quarter to Rs 100.7 crore but fell 7.5% in the fiscal.
White Teak sales grew 33% to Rs 47.7 crore.
Sales at Weatherseal increased 63% to Rs 15.6 crore.
"Looking ahead, we remain confident about a pick-up in demand conditions with a favourable monsoon forecast," Syngle said.
The board of Asian Paints recommended a final dividend of Rs 28.15 per share for the last financial year.
Shares of Asian Paints were trading 4.51% lower on the BSE after the results were announced, compared with a 1.32% decline in the benchmark Sensex at 3 p.m.
