Asian Paints Q3FY25: Net Profit Drops 23%, Revenue Falls 6%, Stock Surges on Strong International Growth

Asian Paints reported a 23% YoY decline in net profit for Q3FY25, totaling ₹1,128 crore, with a 6% drop in revenue. Despite weak domestic demand, the company saw strong international growth, especially in the Middle East and Asia. EBITDA and margins exceeded expectations, leading to a 4% rise in stock price.

CONTENTS:

• Asian Paints Q3 Results: Net Profit Drops 23.5%, but EBITDA and Margins Beat Expectations
• Asian Paints Q3FY25: Net Profit Drops 23%, Revenue Falls 6%, But Stock Surges on Strong International Growth
• Stocks to Watch: Titan, Asian Paints, Tata Power, Godrej Properties, and Others Ahead of Q3FY25 Results
• Asian Paints Q3FY25 Outlook: Declining Revenue and Profit Expected Amid Weak Demand

Asian Paints Q3FY25: Net Profit Drops 23%, Revenue Falls 6%, Stock Surges on Strong International Growth

Asian Paints Q3 Results: Net Profit Drops 23.5%, but EBITDA and Margins Beat Expectations

Asian Paints reported a 23.5% decline in net profit for Q3, totaling ₹1,128 crore, which was slightly below the expected ₹1,150 crore. Despite this, the company’s EBITDA and margins exceeded expectations, with a 1.6% volume growth in its decorative business, outperforming the anticipated flat growth. The company saw a 6% drop in revenue year-over-year, totaling ₹8,549 crore, which was also below expectations due to weak demand, downtrading, and a lackluster festive season. EBITDA fell 20% to ₹1,637 crore, in line with forecasts, while margins contracted by 310 basis points to 19.5%, surpassing the expected 18.6%.

Asian Paints attributed the margin decline to a weak product mix, higher costs, and negative operating leverage. The industrial segment saw a 3.8% revenue increase, and the international business grew by 5%, with a 17.1% rise in constant currency terms, driven by the Middle East and recovering Asian markets. Following the results, Asian Paints’ shares surged by 4.8%, reaching ₹2,404.

Asian Paints Q3FY25: Net Profit Drops 23%, Revenue Falls 6%, But Stock Surges on Strong International Growth

Asian Paints reported a 23% year-on-year decline in net profit for Q3FY25, totaling ₹1,128 crore, compared to ₹1,475 crore in the same period last year. Revenue also fell by 6%, reaching ₹8,549 crore, down from ₹9,103 crore in Q3FY24. A poll of brokerages had expected a smaller revenue decline of 3.4% and a 22% drop in net profit. Despite the profit drop, Asian Paints’ stock saw a nearly 4% increase by mid-afternoon, trading at ₹2,378 per share.

The company cited muted demand, downtrading, and weak festive season sales as factors impacting revenue. While the domestic decorative business posted a 1.6% volume growth, its standalone revenues declined by 7.5%. The industrial business saw a 3.8% revenue increase, driven by the General Industrial and Refinish segments. The international business grew by 5% in INR terms and 17.1% in constant currency, led by growth in the Middle East and recovery in key Asian markets.

Asian Paints’ MD & CEO, Amit Syngle, expressed cautious optimism about a recovery in demand and emphasized ongoing investments in brand, innovation, and customer focus.

Stocks to Watch: Titan, Asian Paints, Tata Power, Godrej Properties, and Others Ahead of Q3FY25 Results

Several stocks, including Titan, Asian Paints, Tata Power, Godrej Properties, Torrent Power, Thermax, and Global Health, are set to announce their Q3FY25 results later today. As of early trading, stocks like Godrej Properties, Titan, Asian Paints, and Thermax saw gains of up to 5%, while others such as Global Health, Torrent Power, and Tata Power saw declines of up to 3%.

Titan’s shares dropped by over 1.4% to ₹3,529.30, with market experts predicting 24% YoY growth in jewelry sales. However, they expect a 100 basis point drop in the share of studded jewelry. Asian Paints saw a slight increase in its share price, trading at ₹2,309, with analysts anticipating a soft quarter, expecting only a 1-2% volume growth in domestic decorative paints and a margin compression due to input cost inflation and an unfavorable product mix.

Tata Power edged up by 1.7% but later lost the gains, with analysts forecasting a 3.2% YoY growth in revenue but flat net profit. Godrej Properties surged over 4.35%, with expectations of strong performance driven by new project launches. Torrent Power, however, dropped by more than 2.75%, with analysts predicting a slight revenue decline and a 9% fall in net profit.

Thermax gained more than 2%, though analysts remain cautious about its core business due to challenges in large-ticket orders. Meanwhile, Global Health remained stable, with Axis Securities projecting marginal falls in revenue, EBITDA, and net profit on a quarterly basis, though YoY numbers are expected to be slightly higher.

Asian Paints Q3FY25 Outlook: Declining Revenue and Profit Expected Amid Weak Demand

Asian Paints is expected to report a challenging Q3 for FY25, with a projected decline in both revenue and profit. Brokerages estimate a drop in the company’s topline by 0.5% to 5%, along with a 17% to 29% fall in profit after tax (PAT). These declines are attributed to lower sales volumes and adverse pricing trends.

Nuvama forecasts a 5% drop in year-on-year (YoY) revenue, with a 29% YoY PAT decline, despite a 7% quarter-on-quarter (QoQ) revenue growth. They also anticipate a 2% YoY volume decrease. Antique Stock Broking expects a smaller 1% YoY revenue decline, with a 28% drop in PAT, but a slight QoQ growth in both revenue and profit. JM Financial projects a 0.5% revenue drop, with a 17% fall in PAT, but a significant 46% QoQ increase in net income.

Despite the weak outlook, Nuvama anticipates a gradual improvement for Asian Paints in FY26, although they foresee it lagging behind competitors like Berger Paints due to a slowdown in larger cities.