Asian Paints Q1 profit up 52% to ₹1,550 cr on decorative biz boost

Paint and decor company Asian Paints Ltd has reported a 52.5% increase in its net profit for the April-June quarter of 2023-23 to ₹1,550.4 crore as compared to ₹1,016.9 crore in the year-ago period, on domestic decorative business registering a double-digit volume growth and a relatively healthy value growth.

Consolidated net sales increased by 6.7% to ₹9,153.8 crore from ₹8,578.9 crore, while gross margins improved 530 basis points in Q1 FY’24 as compared to Q1 FY 2023, the company says in a regulatory filing.

Asian Paints’ PBDIT (profit before depreciation, interest, tax, other income, and exceptional items) increased 36.3% to ₹2,121.3 crore from ₹1,556.0 crore, while PBDIT margin as % to net sales improved to 23.2% from 18.1% in the corresponding period of the previous year and 21.3% in Q4 FY'23.

“Our domestic decorative business registered double-digit volume growth and relatively healthy value growth, coming on a high base of the previous year. Both the Auto OE and the General Industrial coating businesses achieved strong double‐digit revenue growth, led by growth in the Protective & Powder Coatings segment," said Amit Syngle, Managing Director & CEO of Asian Paints.

Syngle says Asian Paints’ international business, though supported by good deliveries from the Middle East region, faced macroeconomic challenges and adverse forex conditions in Asian markets. This resulted in overall subdued growth for the international portfolio.

In its international business, sales decreased by 1.4% to ₹ 695.1 crore from ₹705.2 crore. Profit before tax before exceptional items was ₹26.5 crore against ₹37.9 crore in the corresponding period of the previous year.

On the home décor front, the kitchen and bath business segments were sluggish.

In the bath fittings business, sales dipped 28.2% to ₹84.7 crore from ₹118.0 crore on a high base last year due to price increases. In the kitchen business, sales dipped 12% to ₹96 crore from ₹109 crore. Sales at White Teak increased 28.4% to ₹26 crore, while sales at Weatherseal more than doubled to ₹9.8 crore.

On 23 June 2023, Asian Paints acquired an 11% stake in White Teak from its existing shareholders for a cash consideration of ₹ 53.8 crore. This is part of the staggered buyout plan and consequently, White Teak has become a subsidiary.

Asian Paints is ranked among the top 7 coatings companies in the world with a consolidated turnover of ₹34,489 crores, with a market capital of around ₹3.4 lakh crore.

Amit Syngle in the company’s annual report address recently stated that as Asian Paints look forward to the next phase of growth, it has initiated an investment plan of ₹ 8,750 crore across – capacity expansion, futuristic technology and product capabilities, and backward integration.

Reacting to the development, the Asian Paints stock dipped 3.96% to ₹3,402 on the Bombay Stock Exchange. The share opened a gap up at ₹3,554.75 crore and surged to an intra-day high of ₹3,554.75 and soon dipped to ₹3,401.35.