Asian Paints Q2 profit rises 53% to Rs 1,232 cr

New Delhi: Asian Paints on Thursday reported 53.31 per cent increase in consolidated net profit at Rs 1,232.39 crore for the second quarter ended September 2023, helped by sourcing efficiencies and moderating raw material prices.

The company had logged a net profit of Rs 803.83 crore during July-September period a year ago, according to a regulatory filing by Asian Paints.

However, revenue was almost flat at Rs 8,451.93 crore in the September quarter. In the year-ago period, it stood at Rs 8,430.60 crore.

The company has an "improvement in gross margins by about 770 basis points in Q2 FY24 as compared to Q2 FY23," said an earning statement from Asian Paints.

"Operational, formulation and sourcing efficiencies coupled with moderating raw material prices benefitted our margins in Q2 and resulted in strong profit growth for the quarter," Asian Paints Managing Director & CEO Amit Syngle.

Total expense was down 6.13 per cent to Rs 7,021.96 crore in Q2 FY 2023-24 as against Rs 7,480.97 crore in the corresponding period a year ago.

Total income during the September quarter was at Rs 8,643.77 crore, up 1.06 per cent.

Asian Paints' domestic coatings business - decorative and industrial combined - registered a subdued 1.1 per cent revenue growth in the quarter, said Syngle.

"The domestic decorative paint business for Q2 was muted, registering a flat value sale with a 6 per cent volume growth. The erratic monsoon impacted market sentiment potentially leading to deferment of sales to October given the late Diwali this year," he said.

While growth in the automotive and refinish business was decent, general industrial coatings business sustained its double-digit growth trajectory, he said.

During the quarter, Asian Paints' sales from international business fell 3.9 per cent to Rs 775 crore from Rs 806 crore on the back of macro-economic and forex challenges in key markets of South Asia and Egypt.

In the home decor business, sales decreased in the bath fittings business and kitchen business.

Over the outlook, Syngle said:" Looking towards the second half of the year, we remain optimistic about improved demand conditions well supported by the longer festive season and the overall buoyant domestic economic growth.” Meanwhile, in a separate filing, Asian Paints informed that its board has approved payment of interim dividend of Rs 5.15 per equity share of face value of Re 1 each for financial year ending March 31, 2024.

It also approved the appointment of Soumitra Bhattacharya as an additional and independent director of the company for a period of five years with effect from October 26, 2023.

Shares of Asian Paints on Thursday settled at Rs 2,958.40 apiece on BSE, down 3.36 per cent from the previous close.