At 11:45 am, the stock was trading 2.7 per cent higher at Rs 1,756, as compared to 0.6 per cent decline in the S&P BSE Sensex. It was the top Sensex gainer among the benchmark index's constituents.
The management said that after a complete washout in April’20 due to extended lockdown, the company’s decorative business segment witnessed improving business conditions over the next two months. Thus, while the April-June quarter (Q1FY21) ended in a 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.
The other business segments in India including the two industrial coatings business and both the segments in the Home Improvement category also witnessed improving trends in June’20, albeit at a lower pace. Profitability across businesses was well supported by the softer raw material prices and the various cost control measures being actively pursued by the Management, the company said.
Asian Paints' profit before tax (PBT) in Q1FY21 decreased by 70.2 per cent to Rs 305.76 crore from Rs 1,025.24 crore, due to lower sales. The company’s consolidated revenues declined 42.7 per cent to Rs 2,923 crore from Rs 5,105 crore in the corresponding quarter of previous fiscal.
“Despite healthy volume growth, earnings growth has been weak for several years now, which is likely to continue going ahead. Nevertheless, the likelihood of sharp earnings decline, as feared earlier, may not materialize. Therefore, it is possible that Asian Paints, unlike other discretionary peers, would emerge relatively unscathed from the COVID-19 crisis. With better than expected recovery, Asian Paints continues to remain market leader in a category with attractive long term potential,” Motilal Oswal Securities said in results update.