Mumbai: Steep inflation in raw materials and essential commodities seems to have dented the net profits for Asian Paints.
The company posted its results for the quarter ending September 30, 2021.
Consolidated net profit slipped 29 percent from the corresponding period of last fiscal. The net profit was reported at Rs 605.17 crores, lower than the one reported in the corresponding quarter of the last fiscal -- Rs 851.9 crores. Total expenses were reported at Rs 6,418.17 crores against Rs 4,299.12 crores in the same period last fiscal.
Official estimates blamed higher cost of materials as responsible for paring the net profits. Cost of materials was estimated in the quarter gone-by at Rs 4,570.53 crore. In the Sept quarter of the last fiscal, the company reported these expenses at Rs 2,646.49 crores.
Amit Syngle, the Managing Director and CEO at Asian Paints blamed the steep inflation in raw material prices as responsible for the drop. "Steep inflation seen in raw material prices, since the beginning of this calendar year, has been phenomenal and has impacted gross margins across all businesses in the quarter," he was quoted as saying in official reports.
Syngle said that the company has taken a series of price increases. It is likely that Asian Paints may look at further price increases to mitigate from the impact of persistently high inflation. Syngle said he was confident of Asian Paints turning the tide and coming strong in the next quarter.
"Performance in the international business was a mixed bag with good growth in the South Asian markets, while markets in the Middle East and Africa were sluggish with challenges around COVID-19 and forex (foreign exchange) availability," Syngle said.
Among the salient features in the September quarter, Asian Paints' consolidated revenue from operations was reported at a higher level of Rs 7,096.01 crores as compared to Rs 5,350.23 crores in the year ago.
The CEO also highlighted the growth of the domestic decorative business stating that it continued to "move ahead on its high growth trajectory with an unprecedented 34 per cent volume growth in the quarter and a strong compounded growth rates over the last two years."
Stocks of Asian Paints ended the day as the highest bleeder on the thirty scrip sensitive BSE Sensex.
Stocks turned 5 percent in the negative and settled at Rs 3,003.50 apiece. As many as 2.28 lakh shares exchanged hands according to information made available by the Bombay Stock Exchange.