The macro-economic conditions coupled with the extended monsoon have had an adverse impact on the Indian paint industry. This was apparent when Asian Paints, India’s leading paint company and ranked among the top ten decorative coatings companies in the world, announced its third quarterly results yesterday, 22 January 2020. Asian Paints reported an increase of 3% in its consolidated revenue from operations for the quarter ending 31 December 2019. The revenue from operations increased to Rs 5,420.28 crore in Q3'FY20 from Rs 5,263.04 crore in the same quarter last fiscal. The company registered a consolidated profit growth of over 20.5% this quarter. The profit numbers stood at Rs 779.71 crore in the quarter as against Rs 647.28 crore in the same period last fiscal. The consolidated revenue over the last three quarters of FY'20 stands at Rs 15,575.66 crore as against Rs 14,256.95 crore over the same period in FY'19.
“The decorative business segment in India registered a low double digit volume growth, impacted by the slowdown in the overall economy. Automotive coatings JV (PPG-AP) business continued to be impacted by the downturn in the automobile industry while the Industrial Coatings JV (AP-PPG) business saw some demand pick-up in the protective coatings segment. Benign raw material prices benefited the entire coatings business," remarked K B S Anand, MD & CEO, Asian Paints Limited. He added that the segments in the home improvement category - kitchen (Sleek) and bath (Ess Ess) - business, continued to be impacted by the slowdown in the real estate construction space.
Read More: What is Driving the Indian Paint Industry?
According to Anand, the adverse factors - macro-economic and extended monsoon - coupled with some pre-ponement of sales to the second quarter given an early Diwali impacted Asian Paint's domestic decorative business with volume growth in low double digits. However, the paint major will continue to focus on its strategy to grow the bottom of the pyramid with large push on economy range of products which continue to grow at a much faster rate than the premium range of products. The Smartcare waterproofing and adhesives product range have been doing well and the company's focus on décor through the Paint Total service will continue to be pushed forward, shared Anand in his introductory remarks during the investors call.
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