India's largest paint manufacturing company, Asian Paints Ltd., reported a volume growth of 6%, lower than the CNBC-TV18 poll of between 7% and 9%. Sales in value terms remained flat.
The domestic coatings business, decorative and industrial combined, registered a subdued 1.1% revenue growth during the quarter.
"Erratic monsoon impacted market sentiment potentially leading to a deferment of sales to October, given the late diwali this year," the company said in a statement.
For the September quarter, Asian Paints reported revenue of ₹8,479 crore, which was lower than the CNBC-TV18 poll projection of ₹8,900 crore. Operating profit or EBITDA of ₹1,717 crore was also lower than the ₹1,800 crore projection in the CNBC-TV18 poll.
The company's net profit and margin were in-line with expectations of ₹1,232 crore and 20.2% respectively.
On the positive side, Asian Paints' gross margin expanded by 765 basis points from last year and by 45 basis points compared to the June quarter.
Asian Paints spoke about constrained profitability in the International business, despite robust growth in the Middle East. It attributed the macroeconomic challenges, inflation and forex availability in key geographies of South Asia and Egypt.
"While demand in the Home Décor space was soft on account of muted consumer sentiments, we continued to strengthen our décor foray with new collections, network and store expansions," the company said.
Asian Paints MD & CEO Amit Syngle said that the company remains optimistic about improving demand conditions along with the longer festive season and the overall buoyant domestic economic growth.
Additionally, the company has also declared an interim dividend of Rs 5.15 per share.
Shares of Asian Paints are down to the day's low, currently trading 3% lower post the earnings announcement. The stock is trading 2.6% lower at Rs 2,980.65.
First Published: Oct 26, 2023 1:52 PM IST
