Asian Paints share prices fall by 9.5% after weak quarterly results. It was the lowest in past 3 years. The company is the top paint manufacturer in the country. However, the quarterly results were lower than the predictions. The company has a current share price of Rs. 2,543.10 per share. It opened at Rs. 2,565.05 and closed at Rs. 2,547 per share. Let us have a look at the reasons behind Asian Paints’ fall in the share price.
Asian Paints Shares Fall By 9.5% On Monday
Asian Paints shares fell by 9.5% today and closed at Rs 2,547 per share. Its quarter results also fell to the lowest in past 3 years. The predictions were much higher than the actual results. The main reasons behind the fall in the Asian paints quarter results are said to be a fall in consumer demand. Due to several reasons, the consumer’s demand also felt. It includes heavy rainfall and excessive heat. There was also inflation in the raw material price.
Asian Paint’s profitability was affected due to monsoons and heat waves. Its decorative and coatings business demand also fell. As climate change was at its peak this year, the company experienced a fall in its sales. On the other hand, the prices of the crude oil imports also increased due to middle east countries ongoing tension. As we know extracts from crude oil play a crucial role in paint manufacturing. Thus, it increased the prices. While many consumers stayed with the brand value, others also shifted to cheaper options.
Apart from that, the new competitors also offered the products at cheaper prices to establish their presence in the company. It also impacted the market’s overall profitability. If we talk about its quarterly profits, Asian Paints has a consolidated net profit of Rs. 693.66 Crores. It has currently a fall of 43.71% for the quarter. While the EBITDA was also at Rs. 1,240 crore. On the other hand, Asian Paints had a fall of 18.09% on a monthly basis. On the other hand, it had a yearly fall of 17.34%.
Asian Paint’s 52-week high was Rs. 3,422.95 while its 52-week low was Rs. 2,506 that was on Monday. The analysts recommend holding the stock. Asian Paints Managing Director and CEO, Amit Syngle, also mentions margin front, soft demand conditions and material price inflation as the main reason. Despite that, Asian Paints is providing an interim dividend of Rs. 4.25 per equity at a face value of Rs. 1 each. Stay tuned for more information.