Asian Paints Net Sales Rise 3.9% in October-December; Margins Expand 200 BPS Amid Rural Growth

Asian Paints Limited reported a consolidated net sales growth of 3.9% year-on-year for the quarter ended December; driven by high single-digit volume growth and rural demand slightly outpacing urban centres.

The company in a press release to the exchanges stated that consolidated gross margins expanded by 200 basis points (BPS) to 44.3%, aided by raw material deflation and sourcing efficiencies.

Financial Performance
The consolidated profit before depreciation, interest, and tax (PBDIT) increased by 8.8% year-on-year and the PBDIT margin improved by 90 BPS to 20.1%. Profit after tax (PAT) before minority interest and exceptional items stood at ₹12.16 billion, a growth of 7.7%.
On a standalone basis, Asian Paints recorded net sales growth of 2.9% despite a shorter festive season and prolonged monsoons in certain regions. Standalone gross margins rose by 200 BPS to 44.9%. Standalone PBDIT grew by 7.8% with margins expanding by 100 BPS to 21.4%. The company reported standalone PAT before exceptional items of ₹11.77 billion, up 6.6% year-on-year.
For the nine months ended December, consolidated net sales rose by 3.2%, while PBDIT margins expanded by 70 BPS to 18.7%. The company stated that growth momentum accelerated in the second and third quarters.

Segment Performance
The company highlighted that all product categories contributed to volume growth. The 'PreLux' portfolio continued its upward trajectory, aiding realization, while the waterproofing portfolio expanded, reinforcing category leadership.

In the International Business, sales grew 6.3% in ₹ terms and 4.2% in constant currency. Growth was led by units in Sri Lanka, the UAE, and Ethiopia. Profitability in this segment improved, with profit before tax (PBT) margins rising 140 BPS to 8.8%, supported by material deflation and the divestment of loss-making operations in Indonesia.

The Industrial segment recorded robust growth. The PPG Asian Paints (PPGAP) joint venture saw revenue rise 16.9%, driven by the automotive and general industrial segments, with PBT margins increasing 300 BPS to 25.1%. The Asian Paints PPG (APPPG) joint venture reported 16.5% revenue growth, led by protective coatings, though PBT margins contracted 40 BPS to 8.0%.
The 'Beautiful Homes' network has expanded to 74 stores, including a new 15,000 sq. ft. luxury studio in Hyderabad.

Exceptional Items
Standalone exceptional items totalled ₹1.67 billion, including an impairment loss of ₹1.06 billion on the White Teak investment and ₹605.6 million towards labour code liabilities.

Outlook
In its filing, Asian Paints stated it would endeavour to maintain growth momentum in January-March while monitoring demand sustainability. The company expects elevated competitive intensity and enhanced traction from the industrial segment. Management anticipated continuity in infrastructure spending from the upcoming union budget but identified geopolitical uncertainty and exchange rate volatility as key variables impacting input prices.