Asian Paints Q3 net profit rises 6%, misses estimates; shares lower

Asian Paints on Thursday reported a consolidated net profit of ₹1,097 crore during the third quarter ended December 2022 (Q3 FY23), up over 6% from ₹1,031 crore in the year ago quarter. The profit was below estimates as muted demand offset the benefits from a correction in raw material costs. Analysts, on average, had expected a profit of ₹1,160 crore, according to Refinitiv IBES data. Meanwhile, the company's revenue from operations rose about a per cent to ₹8,636 crore as compared to ₹8,527 crore year-on-year (YoY).

The company said that the domestic Decorative Business registered a flat volume and value sales delivery for the quarter, on a very high price increase base in the previous year. 

“The extended monsoon in October also affected retailing in the peak festival season; but demand picked up in November and December leading to a double-digit growth for the Decorative Business in December. Overall, on a 9 month basis, the Decorative Business continues to grow at healthy double digit volume and value growths with strong CAGRs,” it said.

International business' sales increased by 2% in Q3 FY23 to ₹778.8 crore from ₹762 crore. In constant currency terms, sales increased by 13.4%. Under home decor segment, Bath Fittings business' sales decreased by 11% to ₹89.8 crore whereas Kitchen business' sales decreased by 7% to ₹100.6 crore.

"The operating margins improved strongly on sequential basis as well as saw an improvement on a y-o-y basis driven by deflation in some of the raw material prices as well as continued work on driving operational efficiencies across businesses.. We continue to work diligently on multiple strategic initiatives to further strengthen our business model and deliver sustained value to all our stakeholders” said Amit Syngle, Managing Director & CEO of Asian Paints Limited.

Shares of paint maker Asian Paints were trading over a per cent lower to ₹2,902 apiece on the BSE in afternoon deals. The stock has declined more than 11% in a year's period.