Asian Paints Q2FY24 earnings: Net profit up 53.28%; company announces interim dividend

New Delhi: Asian Paints Ltd., India’s largest paints maker, on Thursday reported a consolidated net profit of ₹1,205.4 crore for the fiscal second quarter (Q2 FY24), up 54% year-on-year (YoY) from ₹782.7 crore. Revenue rose 0.3% to ₹8,478.57 crore during the quarter ended September, it said in an exchange filing.

Earnings before interest, tax, depreciation, and amortization (Ebitda) came in at ₹1,716.2 crore, with an Ebitda margin of 20.3%. Net cash at the end of the second quarter stood at ₹3,542.8 crore. However, net sales did not meet Bloomberg analysts' projections, which stood at ₹9,011.31 crore.

“The erratic monsoon impacted market sentiment potentially leading to deferment of sales to October given the late Diwali this year. Growth in our Automotive and refinish business was decent. In contrast, our General Industrial Coatings business sustained its double-digit growth trajectory,” said Amit Syngle, managing director & CEO of 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. Looking towards the year's second half, we remain optimistic about improved demand conditions well supported by the longer festive season and the overall buoyant domestic economic growth," he added.

The company during the quarter under review saw a 6% volume growth in the decorative paints segment. Additionally, a consistent growth in revenue was observed from its industrial paints segment.

On the other hand, revenue from international business saw a dip of 3.9% to ₹775 crore, attributed to various macroeconomic hurdles. “Our international business, though supported by robust growth in the Middle East and an overall improved profitability, remained constrained by macro-economic challenges, inflation, and forex unavailability in key geographies of South Asia and Egypt,” Syngle said.

Revenue from home décor business was also subdued during the second quarter of the current fiscal year. Revenue from bath fittings and kitchen segments fell to ₹81.4 crore and ₹96.8 crore, respectively, while the White Teak vertical saw an 8.5% increase in revenue to ₹26.1 crore and the and Weatherseal vertical revenue doubled to ₹12.6 crore.

“While demand in the home décor space was soft because of muted consumer sentiments, we continued to strengthen our décor foray with new collections, network and store expansions,” he added.