Mumbai: India’s top paints maker Asian Paints Ltd’s second-quarter earnings growth lagged forecast, weighed down by weak demand and rising input costs.
The firm reported a 20% fall in net profit to Rs215 crore. Net sales grew 5% to Rs1,812 crore.
A Reuters poll of brokerages had estimated a net profit of Rs244 crore on sales of Rs2,009 crore.
“The prolonged monsoon experienced in most parts of the country affected paint demand in the second quarter,” said P.M. Murty, managing director & chief executive officer, in a statement.
“We expect demand conditions to improve going forward; although the continued upward trend witnessed in raw material prices remain an area of concern,” he added.
The company also said its performance was hit as some of the overseas subsidiaries in the Carribean and Middle East faced challenging market conditions, but did not give details.
Asian Paints is also in the process of expanding capacity and is investing Rs735 crore for a 400,000 tonnes a year plant in Maharashtra.
It expects the first phase of the project to be commissioned by end-2012. Shares of the company ended down 3.63% at Rs2,502.9 in a weak Mumbai market.