 "Q4")
Asian Paints on Thursday reported a decline in the fourth-quarter revenue on the back of price cuts and subdued demand.
India’s largest paint maker saw its net profit rise 1.8 per cent in the quarter ending March 2024 but missed estimates. Its profits swelled to Rs 1,256.7 crore and its decorative paints business (India) volumes stood at 10 per cent.
During the quarter, the company’s net sales stood at Rs 8,701.5 crore, down 0.6 per cent due to weak demand conditions and downtrading, the company said in its release.
Bloomberg estimated its net profit at Rs 1,332.8 crore while its revenue was estimated to be at Rs 9,126.7 crore.
The company also said the quarter saw price cuts across product categories, which also suppressed its revenue growth.
The paint major’s coating business in India registered a revenue decline in the January-March quarter, while its industrial business saw a robust quarter.
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Its home decor business continued to see gains from synergies and its international business registered improved profitability in the quarter as well as in FY24, but its revenue growth was limited by macro-economic headwinds in key geographies of Nepal and Egypt, it said.
In FY24, its revenue crossed Rs 35,000 crore.
“Our Decorative and Industrial coatings combined, delivered a volume growth of 10 per cent and value growth of 3.9 per cent for the year with our Industrial segment registering double-digit value growth,” Amit Syngle, managing director and chief executive officer at Asian Paints.
“Profits for the year have grown in strong double digits supported by subdued material prices coupled with sourcing and formulation efficiencies,” he added.
Syngle said the company’s decorative business volume grew at a healthy clip of 10 per cent in the fourth quarter. However, revenues were 1.8 per cent lower than last year impacted by the weak demand environment and downtrading, particularly in the premium segment. “The economy and luxury range though, grew well. Price cuts implemented in the last few months also affected the fourth quarter value,” he explained.
Overall, the coatings revenue, including Industrial, remained flat for the quarter. Our International Business has seen steady growth in the West Asian and African markets but remains constrained by macro-economic headwinds in South Asia and Egypt, he said.
Despite these challenges, the profit delivery in the global business has been strong all through the year, he added in its earnings release.
In his outlook, Syngle added: “Looking ahead, we remain confident about a pick-up in demand conditions with a favourable monsoon forecast. We will continue to innovate with speed and invest in our brand, focusing on our consumers and keeping their interests at the forefront.”
