One of the leading paint manufacturers in the country, Asian Paints, announced its Q3 FY22 results. The company reported a 70% QoQ increase in its PAT at Rs 1,031 crore from Rs 605 crore in the previous quarter. On a YoY basis, however, the PAT declined by 18.4% from Rs 1,265 crore in the year ago period.
A significant decline in the net profit is being attributed to the increase in the cost of raw material which increased by 41% YoY to Rs 4,084 crore from Rs 2,889 crore in the corresponding quarter in the previous financial year. Significant hike in several other expenses also led to the sharp incline in the company’s total expenses that climbed up by 38.5% YoY to Rs 7,220 crore from Rs 5,214 crore in the year ago period. The massive increase in the QoQ PAT is largely due to a low base set on lower numbers reported in Q2 FY22.
Asian Paints’ revenue from operations jumped 20% QoQ from Rs 7,096 crore in the previous quarter. On a YoY basis, the revenue from operations saw a 25.6% increase to Rs 8,527 crore from Rs 6,788 crore in Q3 FY21.
The company’s total income came in at Rs 8,599 crore, an increase of 19% QoQ from Rs 7,234 crore in the previous quarter. This is a nearly 25% jump from Rs 6,886 crore reported in the year ago period. However, Asian Paints’ other income stood at Rs 71 crore in the quarter under review compared to Rs 138 crore in the previous quarter and Rs 98 crore in the year ago period.
Amit Syngle, Managing Director & CEO, Asian Paints said that the company’s domestic Decorative business registered yet another strong double digit growth performance. This has been for five quarters in a row. In the recent December quarter the company reported a 18% volume growth, on a strong base of the previous year. The Industrial Coatings business also registered a robust double digit revenue growth especially in the Protective Coatings segment. However, the automotive coatings business was impacted by the challenges facing the automotive sector.
The Home Improvement business continued its streak of healthy growth and registered another solid performance, with a steady expansion trajectory across the country. International Business registered a 9% value growth and was impacted by sluggish market conditions in most of the units in the Middle East and specific challenges like civil unrest in Ethiopia and the forex crisis in Sri Lanka.
On the raw material cost increase, the management commented that the steep and unprecedented inflationary trend in raw material prices continued to impact the Gross margins across businesses this quarter. Substantial price increases have been taken in November and December to mitigate this inflation impact, improving the margins on a sequential basis. We continue to work strongly in enhancing the value proposition for our customers across all business segments and thereby deliver sustained value creation for all our stakeholders.
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