(Reuters) – Asian Paints missed fourth-quarter profit estimates on Thursday, dented by weak retail demand for its decorative paints as consumers gravitate toward more affordable local brands, along with losses from the sale of its Indonesian business.
The company reported a net profit of 6.92 billion rupees ($81.04 million) for January-March, down 45% year-on-year, and below analysts’ average estimate of 10.84 billion rupees, as per data compiled by LSEG.
Asian Paints, India’s biggest paintmaker by market share, also incurred a one-time expense of 1.83 billion rupees, which includes losses from the sale of its operations in Indonesia.
Indian paintmakers are facing sluggish retail demand as consumers shift toward cheaper, local brands amid rising competition, especially after Grasim Industries entered the market last year.
Asian Paints’ efforts to regain customers through price cuts pressured its quarterly sales, which fell 4.3% year-on-year to 83.30 billion rupees.
The company posted a nearly 2% volume growth in its domestic decorative segment — which includes paints, waterproofing coatings, and wood finishes — and contributes nearly 90% of its overall revenue.
Pre-earnings estimates from at least three brokerages projected the company’s quarterly volume growth to range between 1% and 6%.
“The weak demand conditions prevalent for the past few quarters continued to affect the paint industry … we are cautiously optimistic about a recovery in demand condition,” said MD and CEO Amit Syngle in a statement.
Shares of the company were trading 1.2% lower.
Earlier this week, smaller peer Kansai Nerolac posted a surprise quarterly profit drop.
($1 = 85.3900 Indian rupees)
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips)
