Asian Paints Reports 35% Profit Surge in Q4, Driven by Raw Material Softening and Luxury Product Growth

18 Jan 2024 , 02:39 PM

Asian Paints reported a 35% YoY increase in net profit for Q4, reaching Rs 1,447.98 crore. Quarterly revenue grew by 5.4% to Rs 9,074.9 crore, driven by industrial business growth and an extended festive season.

CEO Amit Syngle highlighted strong revenue and profit margins in Auto OE and General Industrial coating businesses.

Margins benefited from luxury product growth, softened raw material prices, and operational efficiencies in Q3. Material costs for Q3 rose marginally to Rs 3,837.04 crore; EBITDA was Rs 2,056.1 crore with an operating margin of 22.7%. 12% volume growth observed in the decorative paint business during the quarter.

International business faced challenges, with revenue flat at Rs 779.1 crore; growth observed in the Middle East and Africa.

The home decor business saw revenue improvement, driven by new categories; bath fittings declined, kitchen remained flat.

White Teak vertical experienced an 18.3% revenue rise. Asian PPG Industries Ltd (APPG) recorded a 10.1% revenue increase to Rs 288 crore.

PPGAP (PPG and Asian Paints) had a 12.3% sales increase, reaching Rs 576.2 crore. Nuvama Institutional Equities noted a 27% EBITDA increase, with a slight revenue miss of 2-3%.

Entry of Grasim, Pidilite, and JSW intensifies competition in India’s paints sector. Despite expected stock pressure, Asian Paints is considered a favorable long-term investment.

Estimated value of India’s decorative paints industry is Rs 70,000 crore, witnessing double-digit growth driven by consumer aspirations and ‘Housing for All’ initiatives.

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