Asian Paints posts a strong quarter as demand for decorative paints improves ahead of festive season

Asian Paints posts a strong quarter as demand for decorative paints improves ahead of festive season
Asian Paints
  • Asian Paints Q2 earnings deliver on all fronts, led by strong volumes and margin growth.
  • Revenue grew by 5.4% year-on-year to ₹5,350 crore during the July-September quarter.
  • Margin surges to 23.7%, while decorative paints business clocks in double-digit volume growth
India’s largest multinational paint company Asian Paints reported a better than expected second quarter on the back of double-digit volume growth in the decorative paint business. The company’s consolidated profit grew 1.1% to ₹851.90 crore for the first quarter ended September 30.

The company’s total revenue from operations was up 5.5% year-on-year to ₹5350.23 crore during the period. The board of directors approved an interim dividend of ₹3.35 per share for the quarter.

Asian Paints Q2 Growth (YoY)
Revenue5.5%
Profit1.1%

Decorative paint segment led to strong growth

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The company said its decorative paint segment registered a healthy double-digit volume growth for the quarter with demand picking up across regions.

Asian Paints posts a strong quarter as demand for decorative paints improves ahead of festive season

“All the business segments continued to witness improving demand conditions on a progressive basis during the second quarter of this financial year. Profitability across businesses was well supported by a better product mix, the stable raw material prices, favourable foreign exchange rate and the large number of cost optimization measures put in place by the management,” said Amit Syngle, Managing Director & CEO, Asian Paints.

Strong margins aided by low operating cost

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Crude oil derivatives are a key raw material used by paint companies, and with low crude oil prices in the last quarter, the margins were set to expand. Margins in the second quarter grew 4.8% to 23.7% compared to the same quarter last year. The raw material cost as a percentage of the net sales also declined 550 bps to 49.5%.

The phased re-opening of the economy post the lockdown also helped the other business segments in India, industrial coatings businesses and home improvement category.

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