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Asian Paints Q4 Results Disappoint as Revenue Declines
Asian Paints Limited, India's largest paint company, reported a disappointing set of financial results for the fourth quarter (Q4) of the fiscal year 2024. The company's revenue declined by 0.6% year-on-year to ₹8,731 crore, falling short of analysts' estimates of ₹9,050 crore.
The decline in revenue was attributed to weak demand conditions and downtrading, a trend where consumers switch to cheaper alternatives due to economic pressures. The company's decorative business, which accounts for the majority of its revenue, saw a 10% growth in volume, but this was offset by a decline in the premium segment.
Net profit for the quarter stood at ₹1,275 crore, lower than the estimated ₹1,370 crore. Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) also missed estimates, coming in at ₹1,692 crore, a 9.3% decline year-on-year. EBITDA margin narrowed by 170 basis points to 19.4%, below the estimated 21.5%.
Despite the challenges, Asian Paints' management expressed confidence in a pickup in demand conditions with a favorable monsoon forecast. The company's Automotive coatings business crossed ₹2,000 crore in revenue during the financial year 2024, providing a bright spot.
Other segments of the company performed mixed. Bath Fittings business sales declined by 8% during the quarter, while Kitchen business sales increased by 2.8%. White Teak and Weatherseal sales grew by 33.3%.
The company's stock price declined by 4% after the announcement of the results, reflecting investor disappointment. Shares of Asian Paints are down nearly 20% so far in 2024.
Key Takeaways
- Asian Paints' Q4 revenue declined by 0.6% due to weak demand and downtrading.
- Volume growth was 10% for the quarter, beating estimates.
- EBITDA declined by 9.3% year-on-year, missing estimates.
Source: Asian Paints Q4 Results: Weak demand, downtrading hurts revenue; Volume growth of 10%