Asian Paints Faces Profit Drop Amid Heatwave and Election Slowdown

Asian Paints Ltd on Wednesday reported a 24.64% decline in consolidated net profit to Rs 1,186.79 crore for the June quarter, adversely affected by a demand slowdown due to a severe heatwave and general elections.

During the same period last fiscal year, the company posted a consolidated net profit of Rs 1,574.84 crore, according to a regulatory filing. Consolidated revenue from operations dropped to Rs 8,969.73 crore from Rs 9,182.31 crore in the year-ago period.

Total expenses increased to Rs 7,559.04 crore, from Rs 7,305.09 crore in the corresponding period of the previous fiscal.

"Demand conditions for the paint industry were tough, impacted by the severe heatwave and general elections in the quarter," said Asian Paints Ltd Managing Director & CEO Amit Syngle.

Despite a 7% volume growth in the decorative segment, aided by some movement in rural markets, the company's value declined 3% due to a price decrease earlier in the year and a shift in product mix, Syngle added. Unanticipated material price inflation and supply chain challenges also affected profitability in the decorative business.

However, the industrial business performed better, growing by 5.8% in value, driven by robust growth in the auto OEM and powder coatings segment.

Internationally, regions like Ethiopia and Sri Lanka saw growth due to gradual economic recovery, but challenges persisted in Nepal, Bangladesh, and Egypt.

Looking ahead, Syngle commented, "In the near term, we expect demand conditions to improve on the back of improving rural sentiment and the gradual onset of the monsoon. We remain focused on driving growth through enhanced brand saliency, innovation, and customer centricity."

(With inputs from agencies.)