Asian Paints falls 4% post weak Q1 profit

Shares of Asian Paints Ltd dipped as low as 4% during the early morning trade as the company reported a 25% fall in its net profit in the April-June quarter of FY2024-25, much below estimates by analysts. Mumbai-based paint major reported a 24.5% decline in its consolidated net profit at ₹1,170 crore compared to ₹1,550.4 crore in the year-ago period.

The company's net sales decreased 2.3% to ₹ 8,943.2 crore from ₹9,153.8 crore.

The company's gross margin was compressed 40bps YoY to 42.5% in Q1 FY25, due to commodity inflation and inferior product mix.

However, it took a price hike of around 1% in July 2024, which could improve the margins in the coming months.

The company's EBITDA margin experienced a sharp decline, down 422bps YoY, at 18.9% in Q1 FY25 and EBITDA fell 20% YoY to ₹1,690 crore, primarily due to an increase in employee cost and operating overheads.

Asian Paints shares are trading at ₹2,929.75 today, down 44.65 or 1.50%, on the BSE (12.01PM), with an m-cap of ₹2,81,020.97 crore.

The scrip's one-year return has fallen by 16.59%. In the past six months and one year, the scrip fell 7.67% and 13.98%, respectively.