(Reuters) -India’s Asian Paints missed third-quarter profit estimates on Tuesday, though stronger-than-expected volume growth in its core domestic decorative business lifted its shares by 5%.
The paintmaker’s consolidated net profit during October-December slumped 23% to 11.11 billion rupees ($127.6 million) year-on-year, slightly below analysts’ average estimate of 11.31 billion rupees, as per data compiled by LSEG.
The 1.6% volume growth in the decorative business was higher than our expectations of a 1% this quarter, said Antu Thomas, a research analyst at brokerage Geojit Financial Services.
Asian Paints, India’s largest paintmaker by market share, was among the top percentage gainers in the benchmark Nifty 50.
Shares of the company jumped 5% following the results but pared early gains, trading up 2.5% at 2,352 rupees.
Revenue from operations dropped 6% to 85.49 billion rupees, and came in below market expectations of 89.19 billion rupees.
Asian Paints is the first among its peers to report quarterly results. Kansai Nerolac and Akzo Nobel India are slated to report their earnings later this week.
Over the last few quarters, Asian Paints has been grappling with increased competition following Grasim Industries’ entry in the sector, while inflation-strained shoppers tightened their purse strings and opted for cheaper private labels.
($1 = 87.0550 Indian rupees)
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibility for its content.