A laborer pours yellow water-based paint into a plastic jar at a Kamal Paint Industries manufacturing facility in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)  

Q4 Results: Asian Paints’ Profit Misses As Margin Shrinks

Asian Paints Ltd.’s net profit for the March quarter fell short of estimates as margin contracted on account of higher raw material prices and marketing costs.

The paint maker’s net profit fell 1.6 percent over last year to Rs 473 crore in the three-month period, according to its exchange filing. That compares with the Rs 587-crore consensus estimate of analysts tracked by Bloomberg. Revenue rose 11.7 percent on a yearly basis to Rs 5,018 crore.

Operating income, or the earnings before interest, tax, depreciation and amortisation, declined 2 percent to Rs 822 crore from last year. Operating margin contracted 230 basis points to 16.4 percent. The company declared a final dividend of Rs 7.65 per share.

Shares of Asian Paints declined 2.7 percent to Rs 1,348.50 apiece after the earnings announcement. The stock has advanced 13 percent in the past one year compared with a 4 percent gain in the Nifty.

The automotive coatings JV growth was impacted as a result of the slowdown in the auto OEM segment. High raw material prices and marketing spends in the fourth quarter affected the margins.
KBS Anand, managing director & CEO, Asian Paints (in a press statement)

Other Highlights (YoY):

  • Paints segment rose 11.5 percent to Rs 4,899 crore.
  • Home improvement business grew 21.4 percent to Rs 119 crore.
  • Other expenses jumped 13 percent to Rs 929 crore.
Q4 Results: Asian Paints’ Profit Misses As Margin Shrinks