Asian Paints Results Today: Asian Paints Q3 FY25 Financial Reports Show 23.5% Profit Drop Amid High Costs and Slow Demand
Asian Paints reported a tough third quarter, with the profit declining 23.5% on weak festive demand and higher costs. The company said that its consolidated net profit stood at ₹1,128.43 crore against ₹1,475.16 crore a year ago.
Revenue also fell by 6% to ₹8,549.44 crore, indicating low demand in major markets.
Urban Markets Witness Weak Festive Demand
The managing director and CEO, Amit Syngle, said that urban markets witnessed weaker sales, which led to a 1.6% volume growth in the decorative paints business, but revenue fell 7.5%.
The festive season, which usually propels higher sales, did not come through, especially in key metro markets. This slowdown in demand weighed on the company's overall performance.
Rising Costs and Product Mix Changes Impact Margins
Higher costs and shifting product mix pressure operating margins and overall growth. Raw material prices, freight, and shifts in consumer demand contributed to a difficult cost environment.
The combination of all these factors has resulted in a tighter profit margin, making it hard for the company to continue the same pace of growth that it experienced before.
Industrial Coatings and International Business Perform Well
The industrial coatings business overcame these tough challenges and rose 3.8%. Leading the charge is the General Industrial and Refinish segments, while demand from automobiles and infrastructure also helped cushion some of the shock for the rest of the organization.
International revenue also showed positive signs, rising 5% in rupee terms and 17.1% in constant currency. Strong sales in West Asia and improving demand across Asia were key in driving international growth. The company’s strategic expansion efforts in these markets yield positive results.
Profit Rebounds Sequentially, Optimism for Future Growth
Whereas growth continued to remain pretty subdued overall, Asian Paints saw profit bounce back a whopping 60% in sequential terms compared to last quarter, an indication of something finally having a semblance of recovery for them.
The company remains cautious about the strengthening demand in the near future. It will further focus on brand strengthening and innovation in the product and digital strategies. Future growth is likely to be supplemented through expanding products, enhancing the distribution network, and digital strategy.
Positive Reaction in Stock Market
The stock responded well to the earnings report, as it closed at 2.69% up at ₹2,355.25 on BSE. In the short run, investors might be placing a bet on its long-term survival.
Analysts believe the company has immense market position and brand strength in Asian Paints, which should help it bounce back in coming quarters despite having an uncertain near-term outlook.