For the March quarter, Asian Paints’ volume growth for the decorative business stood at 1.8%, which is below the CNBC-TV18 poll, which was expecting the volume growth to be between 4% and 5%.
In their post-earnings interaction after the December quarter results, Asian Paints had highlighted that demand conditions will remain challenging in the March quarter, and while volumes may recover sequentially, value growth may take another two quarters to reach low single digits.
Net profit for the quarter fell 45% from last year to ₹700.8 crore, while the CNBC-TV18 poll was working with a figure of ₹1,105 crore.
The net profit is also dragged lower by an exceptional item of ₹179.81 crore during the quarter, out of which there is an impairment loss in its subsidiary worth ₹101.3 crore and a fair valuation loss of ₹78.51 crore towards derivative contracts for future stake purchases in White Teak.
Revenue for the quarter declined by 4.3% on a year-on-year basis to ₹8,359 crore, which is lower than the CNBC-TV18 estimate of ₹8,730 crore.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter fell 15% on a year-on-year basis to ₹1,407 crore, below the CNBC-TV18 poll of ₹1,575 crore.
EBITDA margin for the quarter narrowed by 220 basis points from last year to 17.2%, below the poll projection of 18.2%.
Shares of Asian Paints have corrected 30% from its highs as higher competition and weak consumer sentiments have dented the stock.
53% or 20 out of the 38 analysts having coverage on Asian Paints have a “sell” recommendation on the stock. 11 of them have a “hold” rating, while seven have a “buy” recommendation.
Shares of Asian Paints are currently trading 0.5% lower at ₹2,321.9. The stock is trading at a four-year low.
