On 17th July, Asian Paints announced that its consolidated Q1 FY25 net profit had dropped nearly 25% year-on-year to £114 million, impacted by challenging demand conditions. This decline was greater than analysts’ expectations. Revenue from operations for India’s largest paint manufacturer also came in below forecast, falling more than 2% year-on-year to £876 million.
A Moneycontrol poll of eight brokerages had projected that Q1 net profit would decline by 7.6% year-on-year to £140 million, and revenue was expected to remain almost flat at £902 million for the quarter.
“The demand situation for the paints industry was tough, impacted by severe heatwaves and the upcoming general elections,” said Amit Syngle, Managing Director and CEO of Asian Paints, in a statement.
However, the company expects the demand situation to improve soon. “In the near future, we anticipate an improvement in rural sentiment and better demand conditions due to the ongoing monsoon,” Syngle added.
Profit Before Depreciation, Interest, Tax, Other Income, and Exceptional Items (PBDIT), before the share of profit from associates, declined by 20% to £165 million from £207 million. The PBDIT margin as a percentage of net sales shrank to 18.9%, down from 23.2% in the same period last year, according to the company’s statement.
Sales from international operations fell by 2.3% to £66 million, attributed to economic uncertainties, foreign exchange crises, and liquidity issues in key markets such as Asia and Egypt. In the home decor business, sales in the bath fittings and kitchen segments grew by 10% and 4.6%, respectively.
On 16th July, ahead of the earnings announcement, shares of Asian Paints on the NSE closed 0.4% higher at £2890 per share.
