Asian Paints likely to post muted results for September quarter, here’s what to watch out for

Investors will watch out for volume growth in the second quarter amid the monsoon season, its margins and the impact of the price hike on sales.

The shares closed 2.67% down at ₹2,767 on Friday, November 8, on the NSE ahead of the quarterly results announcement.

Asian Paints may report muted growth in revenue for the September quarter

The paints and home decor company had reported a more than 2% drop in revenue in the first quarter of FY25 as well.

Q2 volume growth to be the focus

Asian Paints had reported a 6% volume growth in the June quarter of FY25. The company had earlier said that it expected volume growth to recover to 10-11% in the second quarter on demand revival in July month after the election period.

Investors will keep a watch on volume growth and the impact of a 1% price hike implemented by paint companies in July in view of high input costs. The company had stated that it intended to hike prices marginally and not roll out the full impact of high input costs. Analysts will watch out for the impact of price hikes on margins.

The company had also reported a decline in the EBITDA margin to 18.9%, in Q1 of FY25 from 23.1% in the previous year. Margins are expected to be under pressure in the second quarter as well.

Investors to keep a watch on home decor business, industrial segment

Asian Paints’ international business had seen a decline in sales while the home decor business saw a revival in sales during the June quarter of FY25. Also industrial business saw single-digit growth.

Investors keep a watch on the performances of the businesses and the company’s outlook in view of the festive season demand in October.

Also, the company announced the capacity expansion of the Mysuru plant from 300,000 KL p.a. to 600,000 KL p.a. and its impact on volume will be eyed by investors.

Asian Paints board to decide on interim dividend on Nov 9

The company has announced that its board will also consider and approve any interim dividend for 2024-25 in its meeting on November 9. Consequently, the record date for payment of the interim dividend, if declared, will be Tuesday, November 19, 2024.

Asian Paints reported a 2.3% fall in net sales in Q1

Asian Paints reported a 2.3% decline in consolidated net sales to ₹8,943.2 crore in the June quarter of FY25 from ₹9,153.8 crore in the year-ago period. Standalone net sales for the company stood at ₹ 7,852.5 crore in the Q1 FY25.

The leading paints maker posted a consolidated net profit of ₹1,170 crore for the June quarter of FY25 which was below street estimates.

Asian Paints share decline over 2% ahead of results

Shares of the company declined up to 2.8% to hit an intraday low of ₹2,763 apiece on the NSE on Friday, November 8, ahead of the announcement of Q2 results. However, the stock recovered some of the early losses to trade 2.19% lower at ₹2,780.45 apiece at 1:32 pm.

Asian Paints shares have declined more than 18% in 2024 so far (year-to-date). The stock has dropped 10.35% in the last one year and over 10% in the past month.