Paint manufacturer Asian Paints Ltd has reported a net profit of ₹850.42 crore for the January-March quarter, lower than market expectations, primarily on account of a one-time loss in its Sri Lanka business amid the crisis in the neighbouring country. Asian Paints' net profit during the year-ago period (Q4 FY21) was ₹852.13 crore.

Amit Syngle, MD & CEO, Asian Paints Ltd, said despite the prevailing uncertainty around Covid-19, macro-economic challenges and heightened geopolitical tensions, the company recorded double-digit value growth across all businesses. "We continued to improve our operating margins on a sequential basis, which was a result of some calibrated price increases, driving the premium and luxury product growths, coupled with some strong work on driving operational efficiencies across businesses," says Syngle.

Asian Paints' revenue from operations grew 20.6% to ₹7,889.94 crore from ₹6,541.94 crore during the year-ago period. Asian Paints' sales increased by 34.6% to ₹28,923.48 crore from ₹21,485.20 crore for the 12-month period ended March 31, 2022. The company's net profit before depreciation, interest, tax, other income, and exceptional items for the said quarter increased 9.5% to ₹1,443.29 crore.

The company said the current economic crisis in Sri Lanka has led to currency devaluation. This has resulted in an exchange loss worth ₹48.50 crore arising on foreign currency obligations of its subsidiary Causeway Paints Lanka (Pvt) Limited in the Jan-March quarter result.

"Consequent to the currency devaluation, foreign currency translation loss of ₹139.87 crore is recognised in the ‘Other Comprehensive Income’ in consolidated financial results for the quarter and year ended 31st March 2022," says the company.

The company says the group has made an assessment of the fair value of investment made in Causeway Paints, taking into account the past business performance, prevailing business conditions and revised expectations for the future performance considering the ongoing economic crisis in Sri Lanka. The company has recognised an impairment loss of ₹13.47 crore on 'goodwill on consolidation', recognised on the acquisition of Causeway Paints, it said.

Asian Paints' board of directors has recommended a final dividend of ₹15.50 per equity share. The company had distributed the first interim dividend of ₹3.65 per equity share in October 2021 for FY 2021-22. With this, the total dividend for FY22 stands at ₹ 19.15 per equity share.

The domestic decorative business grew strongly, registering 8% volume growth and 20% plus revenue growth on a high base. The international business managed to deliver double-digit revenue growth for the quarter despite severe challenges in key markets.

Amid the announcement of quarterly financial results, Asian Paints stock closed 2.46% up or ₹73.95 at ₹3,083.7 on BSE. The stock, however, is facing a downward trend for the past few months. It has plunged 9.88% in the year-to-date period, from the high of ₹3,574.65.

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