Asian Paints (ASIANPAINT) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw 7% volume growth year-over-year, but value declined by 3% due to weak product mix, price cuts, and inflation; 5-year volume CAGR remains strong at 15.3%.

• Rural demand showed early recovery, with T3/T4 cities outpacing T1/T2; premium products and waterproofing performed well, while economy emulsions lagged.

• Home décor and services, including Beautiful Homes Painting Service, continued strong growth, supported by new product launches and network expansion.

• International business revenue declined by ~2% due to currency devaluation and economic challenges in key markets, with constant currency growth of 1.8%.

• Standalone and consolidated financial results for Q1 FY25 were reviewed and approved by the Board on July 17, 2024, in accordance with Ind AS and SEBI regulations.

Financial highlights

• Standalone topline declined 3% year-over-year to ₹7,853 crore; consolidated topline down 2% to ₹8,943 crore.

• Gross margin at 42.9% (standalone), down 40–50 bps year-over-year; consolidated gross margin at 42.4%.

• PBDIT margin at 18.9% (consolidated), down 420 bps year-over-year; standalone PBDIT margin at 20.3%.

• Consolidated net profit for Q1 FY25 was ₹1,186.79 crore, down from ₹1,574.84 crore in Q1 FY24; standalone net profit was ₹1,192.40 crore.

• Basic and diluted EPS (consolidated) for Q1 FY25 were ₹12.20, down from ₹16.17 in Q1 FY24.

Outlook and guidance

• Management expects double-digit volume growth for the remainder of FY25, supported by improving rural demand, festive season, and no election disruptions.

• Price increases of 1% already implemented, with further hikes likely to offset anticipated 1.4%-1.5% inflation.

• Focus remains on narrowing the value-volume gap to 5%-6% as product mix improves and premiumization efforts continue.

• International markets expected to remain challenging, especially Nepal, Bangladesh, and Egypt, but Middle East and Africa may recover.