Asian Paints, the country’s largest paints manufacturer, reported a 43% fall in its revenue for the Apr-Jun quarter due to a sharp deterioration in demand caused by the COVID-19 pandemic.
Against the Rs 2,208 cr fall in revenue (compared to the same three months of 2019), the company’s total non-tax expenses fell by Rs 1,515 cr.
However, the fall in costs was not enough to prevent a hit on the bottom line, where net profit shrunk by Rs 452 cr or 67% to Rs 220 cr.
Nevertheless, the company said it is seeing some improvement in June.
“After a complete washout in April’20 due to extended Lockdown, the decorative business segment witnessed improving business conditions over the next two months,” said Managing Director & CEO Amit Syngle.
“Thus, while the quarter ended in a negative territory, the business registered a healthy double digit volume growth in the month of June’20 to end the quarter on a promising note.
He said the company’s other business segments in India — two industrial coatings businesses and two segments in the Home Improvement category — also witnessed “improving trends in June’20, albeit at a lower pace”.
The International business portfolio did well supported by favourable operating conditions in markets in Middle East and Africa though key markets of Nepal and Bangladesh in Asia were impacted by the pandemic lockdowns, he added.
The company was benefited from a sharp fall in raw material/trading stock expenses, which fell by 57% on year to Rs 1,535 cr from Rs 2,900 cr, saving Rs 1,365 cr, compared to the decline of Rs 2,208 in revenue.
“Profitability across businesses was well supported by the softer raw material prices and the various cost control measures being actively pursued by the Management,” Syngle said.
Nevertheless, employee expenses rose, both on quarter and on year, to Rs 362 cr from Rs 336 cr in the preceding three months. There was also a negative swing of Rs 123 cr in inventory restocking-related expenses.
Asian Paints has operations in 15 countries across the world with 26 paint manufacturing facilities, and sells its goods in over 60 countries.
Among its brands are Asian Paints, Apco Coatings, Asian Paints Berger, Causeway Paints, SCIB Paints, Taubmans and Kadisco Asian Paints.