Asian Paints Q1: Net Profit Tanks 24.5 Per Cent On Weak Demand Conditions

The revenue of the company also slipped to touch Rs 8,970 crore in the quarter under review, falling more than 2 per cent against the corresponding quarter a year earlier

Asian Paints on Wednesday reported a slump of 24.5 per cent in its net profit in the first quarter of the current 2024-25 fiscal year (FY25) on a year-on-year (YoY) basis. The company announced its financial results for the April-June quarter of FY25 and said that its net profit for the quarter declined to Rs 1,170 crore.

The revenue of the company also slipped to touch Rs 8,970 crore in the quarter under review, falling more than 2 per cent against the corresponding quarter a year earlier. This decline was attributed to dampened demand conditions.

However, the decorative paint business (India) of the company clocked a volume growth of 7 per cent during the quarter. The demand was overall impacted by general elections and the severe heatwaves affecting the consumption sentiment.

The firm felt the effect of the price cuts imposed in the previous quarter in its revenue in the reviewing quarter. “Geographies like Ethiopia and Sri Lanka grew well in Q1 on the back of gradual recovery in these economies; macroeconomic issues persisted in key markets like Nepal, Bangladesh, and Egypt, impacting the overall international business performance,” the company said.

The international business of the firm suffered a fall of 2.3 per cent in the sales to Rs 679 crore in Q1FY25, against Rs 695 crore clocked in the quarter ended June in the preceding 2023-24 fiscal year (FY24). This drop was attributed to economic uncertainty, forex crisis, and liquidity problem in crucial markets such as Asia and Egypt.

Amit Syngle, Managing Director and CEO, Asian Paints Limited, elaborated on the results and said, "Demand conditions for the paint industry were tough, impacted by the severe heatwave and general elections in the quarter. We delivered a good volume growth of 7 per cent in the decorative segment aided by some movement in rural markets, however value declined by 3 per cent impacted by the price decrease taken earlier in the year and shift in product mix. Unanticipated material price inflation coupled with supply chain challenges impacted profitability of the Decorative business for the quarter...In the near term, we expect demand conditions to improve at the back of improving rural sentiment and monsoons picking up gradually."