November 11, 2024
New Delhi, India
Asian Paints Q2 Results
Asian Paints, India’s largest paint manufacturer, announced its Q2 FY25 results, revealing a steep 42.4% decline in consolidated net profit to ₹694.6 crore from ₹1,205.4 crore in the same period last year. The company shared its financial performance for the July-September quarter on November 9.
Revenue and Profit Decline
- Revenue: Down 5.3% YoY to ₹8,003 crore from ₹8,451.9 crore.
- EBITDA: Fell by 27.8% to ₹1,239.5 crore, with a margin contraction of 480 bps to 15.5%.
Challenges in Domestic Market
According to CEO Amit Syngle, the paint industry faced muted consumer demand and weather-related disruptions, including extended rains, impacting key markets:
- Domestic Decorative Coatings: Volume dropped slightly, leading to a 5.5% decline in revenue.
Segment Performance Highlights
- Standalone Net Profit: Decreased by 48.1% YoY to ₹602.3 crore.
- Standalone Sales: Dropped by 6.5% to ₹6,840.6 crore.
- International Business: Sales dipped by 0.7% YoY to ₹769.5 crore, affected by macroeconomic issues and currency devaluation in countries like Ethiopia and Egypt.
- Home Decor Segment:
- Bath Fittings: Increased by 2.1% to ₹83.1 crore.
- Kitchen Business: Sales up 8.8% to ₹105.3 crore.
- White Teak Sales: Rose by 19.2% to ₹31.1 crore.
- Industrial Business:
- APPPG Sales: Up by 6% to ₹265.5 crore.
- PPGAP Sales: Increased by 5.9% to ₹524.4 crore.
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Dividend Announcement
- Interim Dividend: Declared at ₹4.25 per share.
- Record Date: Set for November 19.
- Payment Date: On or after November 28.
Market Reaction and Competitor Comparison
Asian Paints’ stock plunged by 8% during Monday’s trading session, reflecting investor concerns over the sharp profit decline. The stock was hovering around ₹2,526, down 8.79% on the NSE at 2 PM IST today.
- Volume Performance: Asian Paints’ sales volumes decreased by 0.5%, underperforming competitors like Berger Paints (3.6% increase) and Kansai Nerolac (4% growth).
Company Overview
Asian Paints is a leading player in the global paint and decor industry, with operations in 15 countries and products available in over 60 countries. The company manages 27 manufacturing plants globally and has diversified into home decor.
Outlook
The substantial drop in profit highlights the challenges posed by subdued consumer demand and adverse weather conditions. The company’s performance in upcoming quarters will be closely watched, particularly in light of competitive pressures and macroeconomic headwinds.
Latest Q2 Results
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