Indian paint maker Asian Paints on Tuesday reported a bigger-than-expected 52 per cent jump in first-quarter profit, helped by robust demand for decorative paints and cooling raw material costs.
The company posted a consolidated net profit of Rs 1.55 crore ($189.5 million) for the quarter ended June 30, beating analysts' estimate of rs 1,381 crore as per Refinitiv data.
The company's costs for materials consumed fell almost 12 per cent, led largely by easing crude prices, which account for about 30 per cent of raw material costs for paint companies.
This, combined with a nearly 7 per cent climb in revenue on strong demand for decorative paints, helped Asian Paints' core profit margin grow to 23.4 per cent from 18.2 per cent a year ago.
Asian Paints said its decorative paint segment, which accounts for about 80 per cent of the company's revenue, logged double-digit volume growth.
However, despite growth in its India businesses, the company said its international segment was subdued.
"Continued macro‐economic challenges and adverse forex conditions in Asian markets resulted in an overall subdued growth for the international portfolio," CEO and Managing Director Amit Syngle said in a statement.
Asian Paints controls nearly half the market share of India's paint industry.
The company, however, is likely to face stiff competition, with Pidilite Industries and J K Cement preparing to foray into the space, and Grasim Industries on track to launch its paint business during the year.
Its smaller peers Kansai Nerolac, Berger Paints, and Indigo Paints will report their quarterly results next month.
Shares of Asian Paints fell as much as 5.5 per cent after the results. They had risen 21.7 per cent in the April-June quarter, outpacing a 10.5 per cent climb in the benchmark Nifty 50 index.
Published 25 July 2023, 10:01 IST