Asian Paints Reports 23.5% Decline in Q3 Net Profit Amid Muted Demand, Weak Festive Season

New Delhi, Feb 4 (PTI): Asian Paints posted a 23.5% decline in consolidated net profit for the third quarter of FY25, citing muted demand and a weak festive season. The company's net profit stood at ₹1,128.43 crore for the October-December 2024 period, down from ₹1,475.16 crore in the same quarter last year, according to its regulatory filing.

Revenue and Market Performance​

Asian Paints' revenue from operations dropped 6% year-on-year to ₹8,549.44 crore, compared to ₹9,103.09 crore in the corresponding quarter of FY24. The company attributed this decline to downtrading trends and sluggish market conditions.

Total expenses in Q3 FY25 stood at ₹7,224.10 crore, witnessing a 1.33% year-on-year decrease. Meanwhile, total income, including earnings from other sources, was reported at ₹8,692.44 crore, marking a 5.9% decline.

Challenges in Domestic Market​

Commenting on the performance, Managing Director & CEO Amit Syngle noted that the paint industry continued to face challenges, particularly in urban centers, due to subdued demand conditions.

• Domestic coatings business witnessed a 6.6% decline, including industrial paints.
• Decorative business in India saw a 1.6% volume growth, but standalone revenues dipped 7.5%, reflecting the impact of weak festive demand.
• Operating margins showed sequential improvement, but a negative product mix and rising sales and distribution costs led to margin pressure on a year-on-year basis.

International Business Performance​

Despite challenges in the domestic market, international sales grew by 5% to ₹818 crore in Q3 FY25, compared to ₹779.1 crore in the same period last year. The company attributed this growth to better macroeconomic conditions in Sri Lanka, Bangladesh, and Nepal, although currency devaluation in Ethiopia and Egypt partially offset these gains.

Future Outlook​

Looking ahead, Syngle expressed cautious optimism regarding demand recovery. "In the near term, we remain cautiously optimistic about a recovery in demand conditions while we continue to invest in our brand and focus on innovation," he stated.

Stock Market Reaction​

Despite the weak earnings report, Asian Paints shares saw a positive movement in the stock market. The company’s stock was trading 5% higher at ₹2,408.35 on the BSE during afternoon trade on Tuesday.

About Asian Paints​

Asian Paints, India’s leading paint and décor company, is among the top 8 global coatings firms, with a consolidated turnover of ₹35,382 crore. Operating in 15 countries with 27 paint manufacturing facilities, the company serves consumers in over 60 nations.

Conclusion​

While Asian Paints navigates short-term challenges, its focus remains on brand investment and innovation, with hopes of a gradual demand recovery in the coming quarters.