Asian Paints released the financial results for the June to September quarter of FY24 on October 26. In the September quarter, the company's consolidated net profit surged by 53.3% to ₹1,232.39 crore as against ₹803.83 crore in the same period last year. The company attributes improved margins owing to operational, formulation and sourcing efficiencies as well as moderating raw material prices to be the reason behind strong profit growth in Q2.
During the quarter under review, the company's revenue from operations stood at ₹8,478.57 crore, up by 0.03% as against ₹8,457.57 crore in the same period a year ago.
"The domestic coatings business, decorative and industrial combined, registered a subdued 1.1% revenue growth in the quarter. The domestic decorative paint business for Q2 was muted, registering a flat value sale with a 6% volume growth. The erratic monsoon impacted market sentiment potentially leading to the deferment of sales to October given the late Diwali this year. Growth in our automotive & refinish business was decent, while our general industrial coatings business sustained its double-digit growth trajectory," says Amit Syngle, MD & CEO, Asian Paints Limited.
In Q2, the company’s net sales improved marginally by 0.3% to ₹8,451.9 crore as against ₹8,430.6 crore in the same period last year. The company’s net sales in the international market, however, declined by 3.9% to $775 crore in the September quarter as against ₹806 crore in the year-ago period owing to macro-economic and forex challenges in key markets of South Asia and Egypt. Nonetheless, in constant currency terms, the sales grew by 1.9%, according to the company.
"Our international Business, though supported by robust growth in the Middle East and an overall improved profitability, remained constrained by macro-economic challenges, inflation and forex unavailability in key geographies of South Asia and Egypt," says Syngle.
Meanwhile, the net sales in the home décor segment in Q2 continued to remain soft on muted consumer sentiment, according to Syngle. The sales in the bath fittings business and kitchen business slumped by 20% and 17.9%, respectively. The sales in the white teak and weatherseal business, however, increased by 8.5% in the September quarter.
"Looking towards the second half of the year, we remain optimistic about improved demand conditions well supported by the longer festive season and the overall buoyant domestic economic growth," says Syngle.
Following Q2 results, the share price of Asian Paints closed 3.36% lower at ₹2,958.40. This is in line with the broader BSE Sensex which closed 1.41% or 900.91 points lower at 63,148.15.
