Asian Paints surpassed expectations by reporting 12 per cent year-on-year volume growth in the third quarter of the financial year 2024, slightly below the estimated 13 per cent, according to analysts. The growth was attributed to robust expansion in both rural and urban markets, driven by an extended festive season.
Despite facing challenges such as price reductions and a less favourable mix, the company achieved revenue growth. The success was bolstered by consistently low raw material prices, resulting in the highest gross margin in the last 11 quarters, reaching 43.6 per cent.
The EBITDA exceeded expectations, surging 28 per cent YoY during the quarter, with an EBITDA margin of 22 per cent in the first nine months of the fiscal year 2023-2024 .
In terms of financial performance, Asian Paints reported consolidated net sales of Rs 9,100 crore, reflecting a 5.4 per cent year-on-year (YoY) growth, slightly below analysts' estimate of Rs 9,480 crore.
The company achieved double-digit volume growth of 12 per cent YoY in the domestic decorative paints business. Gross margins expanded, reaching 43.6 per cent, while EBITDA margin expanded to 22.6 per cent.
Despite challenges in the Kitchen and Bath business segments, the overall 9MFY24 performance exhibited growth in net sales (4 per cent), EBITDA (34 per cent), and adjusted PAT (46 per cent) YoY. The management emphasised the sustained double-digit volume growth in the decorative business, highlighting a 3-4 per cent gap in volume and value growth.
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