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Downturn in auto, real estate sectors, lockdown pains hit Asian Paints

The decorative paint major had posted double digit growth in January and February, but failed to achieve the same feat in March

twitter-logoNevin John | June 24, 2020 | Updated 03:38 IST
Downturn in auto, real estate sectors, lockdown pains hit Asian Paints

Indicating the quantum of drop in revenue in the ongoing April-June quarter, which is under the shadow of lockdowns, Asian Paints reported 2.1 per cent dip in consolidated net profit to Rs 461.89 crore in the fourth quarter ended March 2020. The revenue from operations has decreased by 7.1 per cent to Rs 4,635.59 crore. The decorative paint major had posted double digit growth in January and February, but failed to achieve the same feat in March, said Amit Syngle, Managing Director and CEO, Asian Paints.

Analysts said that they don't see any scope in the ongoing quarter, which is mostly under lockdown and the company's lucrative markets, especially in the cities, are largely containment zones.

"Loss of sales due to the lockdown in March'20 impacted the decorative business segment in an otherwise strong quarter with double digit volume growth in the first two months of the quarter. Even with the loss of sales, the decorative business segment in a tough year has registered double digit volume growth for the year and strong profit numbers," said Syngle in a statement.

The industrial business segment under two joint ventures - automotive and industrial coatings - has been impacted by the downturn in the automobile industry. Both the segments in the home improvement category - kitchen (Sleek) and bath (Ess Ess) - continued to be impacted by the slowdown in the real estate construction space.

The international business portfolio did well, supported by growth from markets in Ethiopia, Egypt, UAE and Nepal, said Syngle. However, key units of Sri Lanka and Bangladesh were impacted due to the lockdown conditions. "Profitability across businesses was well supported by the benign raw material prices and cost optimisation efforts," said the CEO.

Asian Paints recently launched hand sanitisers and surface disinfectants under Viroprotek brand. It has launched 'Safe Painting' campaign and the 'San Assure' service, to give safety assurance to Asian Paints customers.

For the 12 months ended March 31, 2020, Asian Paints Group's revenue from operations has increased by 5 per cent to Rs 20,211.25 crore. PBDIT for the group has increased by 10.5 per cent to Rs 4,161.77 crore from Rs 3,765.54 crores. The net profit after non-controlling interest increased by 25.5 per cent to Rs 2,705.17 crore. The net assets and net liabilities as on March 31, 2020 have increased by Rs 616.77 crore and Rs 667.71 crore, respectively.

Asian Paints along with its subsidiaries have operations in 15 countries across the world with 26 paint manufacturing facilities, servicing consumers in over 60 countries through Asian Paints Berger, SCIB Paints - Egypt, Apco Coatings, Taubmans, Kadisco and Causeway.

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