InvestorQ : Why did Asian Paints report a fall in net profits in the Mar-20 quarter?
diksha shah made post

Why did Asian Paints report a fall in net profits in the Mar-20 quarter?

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Arusha Ray answered.
4 months ago
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There was some top line pressure visible on the Asian Paints counter after it reported 2.1% drop in net profits to Rs.462 crore. The consensus estimate was closer to Rs.515 crore and that was disappointing to markets. This fall was driven by a 7.1% fall in total revenues to Rs.4636 crore due to the partial impact of the lockdown and logistical issues.

The profit fall could be contained due to better cost management but the fall in top line did impact the numbers. Though the lockdown began in the last week of March, the impact on raw material movement, transport, supply chain and labour was visible almost from the last week of February itself. That led to lower sales in the quarter.

Ironically, Asian Paints reported despite double digit volume growth in the first two months of the March quarter. However, the month of March proved to be a dampener. While the industrial paints segment suffered due to the slowdown in GDP growth, the decorative paints segment continued to see robust growth till the end of February.

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