Asian Paints Ltd.'s profit missed estimates as extended monsoon dented demand in the peak festive season. Easing prices of key inputs, however, aided margin.
India's largest paintmaker's consolidated net profit attributable to shareholders rose 5.6% year-on-year to Rs 1,072.7 crore in October-December, according to its exchange filing. That compares with the Rs 1,217.1-crore consensus forecast of analysts tracked by Bloomberg.
Sequentially, its net profit rose 37%.
Key Highlights (YoY)
Revenue rose 1.3% to Rs 8636.7 crore against an estimated Rs 9,685.2 crore.
Operating profit rose 4.5% to Rs 1611.4 crore. Analysts had pegged it at Rs 1,803.1 crore.
Margin expanded to 18.7% from 18.1%, driven by deflation in some of the raw material prices. Analysts had forecast it at 18.6%.
"The extended monsoon in October affected retailing in the peak festival season, but demand picked up in November and December leading to a double-digit growth for the decorative business in December," said Amit Syngle, managing director and chief executive officer at Asian Paints.
During the quarter, the domestic decorative business posted a flat volume and value sales delivery on a very high price increase base in the previous year.
Syngle said while it continue to expand in the home décor market, the company witnessed some slowdown in the bath and the kitchen business in the third quarter. Sales dipped 10.9% for the bath fittings category to Rs 89.8 crore, and fell 7.1% for the company's kitchen segment to Rs 100.7 crore.
The industrial business, according to Syngle, "did well" led by strong growth in the automotive original equipment and general segments.
"The international business was a mixed bag with good growth in the Middle East and Africa while the South Asia market, especially Sri Lanka and Bangladesh, got severely impacted by the adverse forex and macro-economic conditions," Syngle said.
Shares of Asian Paints extended losses beyond 1.4% by late afternoon trade compared with a flat benchmark Nifty 50 index.
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