Asian Paints Faces Revenue Challenges Despite Strong Decorative Business Growth

Asian Paints Ltd., the leading paints company in India, experienced a significant increase in its decorative business with a volume growth of 10%, meeting expectations set by CNBC-TV18’s poll. However, the company faced challenges as its revenue for the quarter dropped by 0.6% to ₹8,731 crore, attributing the decline to subdued demand and downtrading in the premium segment.

MD & CEO Amit Syngle expressed confidence in an upcoming demand recovery, buoyed by promising monsoon forecasts.

The net profit for the quarter settled at ₹1,275 crore, falling short of the ₹1,370 crore projection by CNBC-TV18. Despite reporting earnings before interest, tax, depreciation, and amortization (EBITDA) of ₹1,692 crore, missing the estimated ₹1,950 crore, marking a year-on-year decrease of 9.3%.

Asian Paints’ operating margin shrank by 170 basis points to 19.4% during the quarter, below the expected 21.5% margin.

Internationally, their business saw growth in the Middle Eastern and African markets, though challenges persisted in South Asia and Egypt due to macroeconomic factors.

Within India, their coatings business also recorded a 0.7% decline in revenue for the quarter, while the Automotive coatings segment surpassed ₹2,000 crore in revenue for the fiscal year 2024.

Shares of Asian Paints currently trade 3.5% lower at ₹2,742.55, reflecting a nearly 20% decline since the beginning of 2024.