Asian Paints, one of India’s leading paint manufacturers, announced a modest 1.8% year-on-year increase in net profit to Rs 1,256 crore for the quarter ended March 31, 2024 (Q4FY24). The marginal growth comes amidst challenging demand conditions and downtrading observed in the premium segment. However, the reported net profit fell short of street estimates, which had anticipated a figure of Rs 1,333 crore.
The company’s revenue from operations also failed to meet street expectations, recording Rs 8,731 crore compared to the forecast of Rs 9,127 crore by a poll of analysts conducted by Bloomberg. This represented a 0.6% decline from the revenue reported in the year-ago period.
Despite achieving a 10% volume growth in its decorative paints business, Asian Paints experienced dampened revenue growth due to price cuts across product categories. Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) for the quarter stood at Rs 1,692 crore, missing the consensus estimate of Rs 1,944 crore. On a year-on-year basis, Asian Paints reported a 9.3% decrease in EBITDA. Additionally, the EBITDA margin narrowed by 170 basis points during the quarter to 19.4%, significantly lower than the consensus estimate of 21.5%.
The company’s coatings business in India witnessed a slight revenue decline of 0.7% in Q4, while its industrial segment performed strongly. Asian Paints’ home decor business continued to benefit from synergies, and its international business witnessed improved profitability. However, macroeconomic challenges in key geographies like Nepal and Egypt constrained revenue growth.
In FY24, Asian Paints achieved a significant milestone with its revenue crossing Rs 35,000 crore. Amit Syngle, Managing Director and Chief Executive Officer, highlighted the combined volume growth of 10% and value growth of 3.9% in the decorative and industrial coatings segments for the year, with the industrial segment recording double-digit value growth.
Looking ahead, Syngle expressed confidence in a potential pickup in demand conditions, especially with a favorable monsoon forecast. He emphasized the company’s commitment to innovation and brand investment to navigate through the current challenges and capitalize on future opportunities.