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Asian Paints Profit Declines Sharply By 29% to Rs. 605.2 crore in Q2, Stock Price Drops
Asian Paints has published the Q2 result that showed a 29% y-o-y decline in their consolidated profit at Rs. 605.2 crore. Due to inflation, increased costs in raw materials, or hike in input prices Asian Paints profit has suffered significantly, breaking the expectations. After this fall in result, the stock of the company got impacted and dropped by more than 6% immediately. The company's stock fell by 4.88% today, at 3.30 PM IST, till the market was open. However, Asian Paints' consolidated revenue in Q2 has increased by 32.6% y-o-y to Rs. 7,096 crore, crossing the expectations.
Commenting on the sharp decline in their consolidated profits Amit Single, Managing Director & CEO told, "Steep inflation seen in raw material prices, since the beginning of this calendar year, has been phenomenal and has impacted gross margins across all businesses in the quarter." Asian Paints might again look forward to price hikes to mitigate the affects of inflation.
Additionally, Amit Syngle mentioned, "The domestic decorative business continued to move ahead on its high growth trajectory with an unprecedented 34% volume growth in the quarter and a strong compounded growth rates over the last 2 years. The industrial coatings business also registered strong double-digit revenue growth led by robust demand for protective coatings and uptick in the automotive sector."
The company's EBITDA (earnings before interest, tax, depreciation, and amortization) dropped by 28.5% y-o-y to Rs. 904.4 crore, while the margin contracted by 1,085 bps to 12.75% in Q2.
Amit Syngle later added, "Performance in the International Business was a mixed bag with good growth in the South Asian markets while markets in the Middle East and Africa were sluggish with challenges around Covid and forex availability."
Additionally, Asian Paints has approved payment of the interim dividend of Rs. 3.65 per equity share for the FY 2022.
(Also Read: ICICI Bank Registered A 30% Hike In PAT Of Rs. 5511 Crore In Q2, FY22)
