Asian Paints Stock Slumps 8% On 42% Decline In Net Profit
The paint giant’s net profit after minority interest falls to Rs 694.60 crore, down from Rs 1,205.40 crore in the same period last year
The stock price of Asian Paint hit with a bloodbath and shredded 8 per cent in the Monday trading session following the paintmaker's roughly halved second-quarter net profit and volume growth results.
Asian Paints stock traded at Rs 2,557 with 7.65 per cent decline in the morning session on the National Stock Exchange (NSE).
Morgan Stanley reported that Asian Paints' sales volumes, which decreased by 0.5 per cent, were less robust than those of its major competitors, including Berger Paints, which saw a 3.6 per cent increase, and Kansai Nerolac, which reported a 4 per cent overall volume growth.
Asian Paints reported a sharp 42.4 per cent decline in its net profit for the July-September quarter, reflecting the challenges faced by the company in a tough demand environment.
The paint giant’s net profit after minority interest fell to Rs 694.60 crore, down from Rs 1,205.40 crore in the same period last year.
The company attributed the significant profit drop to subdued consumer demand and adverse weather conditions, including prolonged rains and floods in several parts of the country.
In addition to the profit slump, Asian Paints saw its consolidated net sales decline by 5.3 per cent, from Rs 8,451.9 crore in the second quarter of the previous fiscal year to Rs 8,003.0 crore this year.
Amit Syngle, Managing Director and CEO of Asian Paints, noted that the volumes in the domestic decorative coatings segment had declined slightly, while overall domestic coatings revenue dropped by 5.5 per cent.
The company faced challenges due to muted consumer sentiments and the extended monsoon season, which adversely impacted demand in key markets, he added.
