Asian Paints Q1 net profit jumps 52.5%

livemint.com:

Asian Paints Ltd, India’s largest paints maker, reported a mixed set of first quarter numbers on Tuesday, with profit beating estimates even as revenue came below expectations. The company posted a 52.5% increase in consolidated net profit at ₹1,550.4 crore for the quarter from ₹1,016.9 crore a year ago. Consolidated revenue from operations rose 6.7% year-on-year to ₹9,182.31 crore from ₹8,606.94 crore.

Asian Paints’ net profit beat Bloomberg analysts’ estimate of ₹1,351 crore, but its revenue missed their estimate of ₹9,388.5 crore. Shares of Asian Paints ended 4% down at ₹3,400.40 a piece on the National Stock Exchange on profit booking by investors, given the costly valuations, measured by the price to earnings multiple which stands at 85.34 times against the sectoral valuation of 24.54 times. At the operating level profit surged 36.3% year-on-year to ₹2,121.3 crore from ₹1,556 crore , driven by a significant expansion in gross margins.

Gross margins expanded by a whopping 530 basis points to 23.2% in Q1 FY24. “Overall, we have recorded significant improvement in margins, both sequentially as well as on year‐on‐year basis, aided by strong efforts on driving operational, formulation and sourcing efficiencies and supported by easing inflation in raw material prices," said Amit Syngle, Managing Director & CEO of Asian Paints Ltd. “Looking ahead, we remain focused on pursuing growth and are confident about a robust festival season ahead." Analysts gave a thumbs-up to the numbers given the latent potential of certain segments and the fact that fresh competition from the likes of Grasim and JSW Paints is still some time away .