India’s Asian Paints tops profit view on higher decorative paints volumes; shares jump

Asian Paints India’s largest paint-maker by market share, beat quarterly profit estimates on Wednesday, helped by higher-than-expected domestic volume growth in its mainstay decorative paints segment.

Shares of the company, up 0.3% ahead of the results, were last trading 6.3% higher.

Consolidated net profit rose 43% to 9.94 billion rupees ($113.1 million) for the July-September quarter, topping analysts’ expectations of 8.97 billion rupees, per data compiled by LSEG.

The company’s profit had halved to 6.95 billion rupees in the year-ago quarter, hurt by dull retail demand and intensifying competition in the $9.5 billion paints sector.

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To woo buyers, Asian Paints has cut prices, spurring volume growth.

Volumes in the domestic decorative paints segment, which contributes nearly 90% to the topline, grew 11%, exceeding estimates of 2%-4.5% volume growth, according to pre-earnings projections from at least four brokerages.

That resulted in net sales growing 6.4% to 85.14 billion rupees.

Asian Paints is the last among major Indian paint-makers to report earnings for the September-quarter, a period where smaller rivals, such as Berger, Kansai Nerolac and Akzo Nobel India, have been hit by lower demand due to an extended monsoon season.