Asian Paints shares rise 6% to new 52-week high after 43% PAT growth in Q2, interim dividend announcement

Shares of Asian Paints hit a fresh 52-week high of Rs 2,838.70 on Wednesday and closed 6.6% higher at Rs 2,832 on the NSE. The rally came after the company reported a 43% year-on-year increase in consolidated net profit in the second quarter to Rs 994 crore, while revenue rose 6% to Rs 8,514 crore. An interim dividend of Rs 4.5 per share was also declared, with a record date of November 18. Segment-wise, revenue in the international business rose 10% from Rs 846 crore to Rs 769 crore. At constant exchange rates, sales increased by 11%. Profit before special items and taxes (PBEIT) stood at Rs 76 crore. Growth in this segment was led by key markets in South Asia, the Middle East and Africa.

Within the home decor sector, sales of bath accessories fell 5% to Rs 79 crore, with a PBT loss of Rs 4 crore. Sales in the kitchen sector fell 7% to Rs 98 crore.“This was a quarter of focused innovation, good execution and regionalization of initiatives, resulting in strong performance,” said Amit Syngle, MD and CEO, Asian Paints.

The company said it saw an improvement in its domestic decorative business with double-digit volume growth of 10.9% and value appreciation of 6%, despite the challenges posed by an extended and prolonged monsoon.

This growth was driven by the ability to generate demand in urban and rural areas through various regional activations and intensive marketing and brand building measures. “While the home decor industry continues to face headwinds, our progress with Beautiful Homes stores is promising,” the company said in a filing. However, Asian Paints cautioned that the business landscape remains challenging and highly dynamic. “However, we remain steadfast in our commitment to enhance the salience of our brand and drive innovation to deliver sustainable performance and create value for all our stakeholders,” the company said.

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Shares of Asian Paints have seen quite a rally on the Street over the past six months, up 20%. It is a significant outperformance over Nifty’s gain of almost 8%, while Sensex is up 6%.

The stock is currently trading above its 50-day and 200-day simple moving averages of Rs 2,476 and Rs 2,374 respectively.

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