International Business supported by robust growth in Middle East; overall constrained by macro - economic challenges in key markets of South Asia and Egypt
Asian Paints reported a consolidated net profit of Rs 1,232.39 crore for the second quarter of the financial year 2023-24, up 53.31 percent from Rs 803.83 crore in the year-ago period. Sequentially the profit was down 21.74 percent.
The paint manufacturer reported a 0.03 percent year-on-year (YoY) up in consolidated revenue at Rs 8, 478.57 crore in the September quarter against Rs 8,457.57 crore in the year-ago period. The revenue was down 7.66 percent from the June quarter.
“The domestic coatings business, decorative and industrial combined, registered a subdued 1.1% revenue growth in the quarter. The Domestic Decorative Paint business for Q2 was muted, registering a flat value sale with a 6% volume growth. The erratic monsoon impacted market sentiment potentially leading to deferment of sales to October given the late Diwali this year. Growth in our Automotive & Refinish business was decent, while our General Industrial Coatings business sustained its double-digit growth trajectory. 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. While demand in the Home Décor space was soft on account of muted consumer sentiments, we continued to strengthen our décor foray with new collections, network and store expansions.
“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 second half of the year, we remain optimistic about improved demand conditions well supported by the longer festive season and the overall buoyant domestic economic growth.” said Amit Syngle, Managing Director & CEO of Asian Paints Limited.
The earnings before interest, tax, depreciation, and amortization (EBITDA) came in at Rs 1,717 crore against Rs 1,219.3 crore in the year-ago quarter. The EBITDA margin stood at 20.2 percent against 14.4 percent in the year-ago period.
In Q2 FY24, international business sales dropped by 3.9 percent due to challenges in South Asia and Egypt but increased by 1.9 percent in constant currency. Home Décor witnessed a decline in both Bath Fittings and Kitchen sales, while acquisitions White Teak and Weather seal experienced growth. The Industrial sector's APPPG sales grew by 11.4 percent in Q2 FY24.
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