Asian Paints saw a slump in its shares in the stock market on Monday. The company traded at Rs 2,525.85 apiece as markets began the trading week. As of 9:48 AM, the firm’s shares plunged almost 9 per cent.
This decline followed the firm’s weak performance in the July-September quarter in the 2024-25 fiscal year (FY25). The company reported a 42 per cent plunge in its net profit in the quarter and its operating margins were severely impacted during the period.
The consolidated PBDIT (profit before depreciation, interest, and tax) of the firm slumped 28 per cent to Rs 1,239.5 crore in Q2FY25, in comparison to Rs 1,716.2 crore reported in the corresponding quarter a year earlier.
Amit Syngle, MD and CEO, explained that consumer demand has weakened and bad weather conditions have affected the performance in the quarter. The operating margins of the company suffered due to price cuts last year, in addition to higher input costs and selling costs.
"Soft demand conditions, product mix and material price inflation affected margins in Q2. We expect margins to recover in the coming quarters on the back of anticipated softening in material prices coupled with price increases implemented in the last few months," the executive noted.
The company’s revenue from operations declined 5.3 per cent on a year-on-year (YoY) basis to Rs 8,003 crore in the September quarter, while the same stood at Rs 8,451.93 crore in the corresponding quarter in the 2023-24 fiscal year (FY24).
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“The paint industry faced a subdued demand environment during the quarter. Domestic Decorative coatings segment volumes declined marginally, while overall domestic coatings revenue declined by 5.5 per cent for the quarter, impacted by muted consumer sentiments and extended rains and floods in some parts of the country,” Syngle said following the earnings release.