Asian Paints shares fall 5% amid subdued demand in urban areas

/ 2 min read

The paint industry continued to be impacted by subdued demand conditions during the quarter, especially in the urban centres, says Amit Syngle, Managing Director & CEO of Asian Paints.

Shares of Asian Paints fell 5% to hit a low of ₹2,235 on the BSE.
Shares of Asian Paints fell 5% to hit a low of ₹2,235 on the BSE. | Credits: Fortune India

Shares of Asian Paints Ltd tumbled 5% in intraday trade on Wednesday after the paint maker reported a 28% drop in net profit to ₹1,128 crore for the quarter ended December amid subdued demand conditions, especially in the urban centres.

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“The paint industry continued to be impacted by subdued demand conditions during the quarter, especially in the urban centres. We registered a 6.6% decline in overall coatings business in India, including Industrial. The domestic decorative business delivered a 1.6% volume growth while the standalone revenues declined by 7.5% for the quarter impacted by the weak festive season demand,” India’s largest paint maker says in a statement.

“In the near term, we remain cautiously optimistic on a recovery in demand conditions while we continue to invest in our brand and focus on innovation and customer centricity,” says Amit Syngle, Managing Director & CEO of Asian Paints.

Reacting to the third-quarter earnings, shares of Asian Paints fell 5% in intraday trade to hit a low of ₹2,235 on the BSE, dragging down the company’s market cap to ₹2.17 lakh crore.

While the company saw sequential improvement in operating margins, the adverse mix coupled with increased sales and distribution expenses affected operating margins on a year-on-year basis. Its industrial business fared better with revenues growing by 3.8% supported by growth in the general industrial and refinish segments.

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“We continued to see growth in our Home Décor Business progressing on our network expansion journey. On the International side, the portfolio registered 5% growth (17.1% in constant currency terms) driven by growth in the Middle East and recovering macro-economic conditions in key Asian markets,” the company says.

Asian Paints’ revenue declined 6% to ₹8,549 crore in the third quarter of FY25 compared with ₹9,103 crore in the corresponding quarter of the previous year.

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Segment-wise, the company’s international business sales increased in Q3 FY25 by 5% to ₹818.0 crore from ₹779.1 crore on the back of improved macro-economic conditions in Sri Lanka, Bangladesh and Nepal offset by currency devaluation in Ethiopia and Egypt.

Its bath fittings business sales increased in Q3 FY25 by 2.6% to ₹87.6 crore from ₹85.4 crore while kitchen business sales increased in Q3 FY25 by 2.7% to ₹102.7 crore from ₹ 100.1 crore.

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