Asian Paints Q1 earnings update

Last updated: 24 Jul, 2020 | 12:13 pm

Asian Paints Q1 earnings update
  • Profit plunges: Asian Paints Q1 net profit came in 67% down on-year to ₹218.50 crore. Analysts had earlier anticipated earnings of about ₹90 crore. The company’s total income came in 43% down on-year to ₹2,923 crore, above street expectations. 
  • Lockdown effect: ‘After a washout in April, the Decorative Paints segment saw improving business conditions over the next two months in May and June.’{{tweet1}} Both the segments (Paints & Home Improvement) showed a massive decline in growth on QoQ basis.
  • Low raw material costs aid profit: Profitability across businesses was well supported by the benign raw material prices. Notably, crude oil derivatives are a key raw material in the paints business. They had seen an unprecedented crash in the month of March, going as low as $20 per barrel. 
  • Operating margins: Asian Paints’ operating margin declined to 16.5% in the first quarter from 22.7% a year ago. Analysts had earlier expected it to decline to 13.5%. The company’s operating profit fell 58% on-year to Rs 484 crore.

IND Analysis

The company was faced with slowing demand even before the pandemic, as consumers had cut discretionary spending. The outbreak had then halted all economic activity barring essential services starting the last week of March, crimping demand for industrial and household paints. However, the firm was able to protect its margins, thanks to softening raw material prices, and volume growth in May and June. The company said that while the quarter ended in negative territory, the business registered a healthy double-digit volume growth in the month of June’20 to end the quarter on a promising note. Going forward, complete recovery of demand still seems to be a few months away.  

Our VGQM model has a HOLD rating on the stock.

Finzoom Investment Advisors Private Limited (Brand Name - INDmoney, INDwealth,,, makes no warranties or representations, express or implied, on products and services offered through the platform. It accepts no liability for any damages or losses, however, caused in connection with the use of, or on the reliance of its advisory or related services.

Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. Performance and returns of any investment portfolio can neither be predicted nor guaranteed.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Marketing and distribution of various financial products such as loans and deposits are powered by Finzoomers Services Private Limited.

INDmoney, INDwealth, are brand and product of Finzoom Investment Advisors (P) Limited.

© Finzoom Investment Advisors Private Limited

[SEBI RIA Registration No: INA100012190] [Type of Registration: Non-Individual] [Validity of registration: December 17, 2018-Perpetual] [Address: 616, 6th Floor, Suncity Success Tower, Golf Course Extension Road, Sector – 65, Gurugram, Haryana- 122005] [Principal Officer details: Mr. Gaurav Sharma, Email id:, Contact No. 8800826254] [Corresponding SEBI local office address: Securities and Exchange Board of India, Local Office, First Floor, SCO 127-128, Sector 17C, Chandigarh-160017]

[ARN - 151913] [Platform Partner : BSE (Member code-24801)] [CIN - U67190HR2018PTC073294] [GST No : 06AADCF3538Q1Z8]