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Share of Asian Paints dipped 4 per cent to Rs 2,855.60 on the Bombay Stock Exchange (BSE) in Monday’s intra-day trade, thus falling 10 per cent in past three trading sessions post Q2 results. The company had reported 28.2 per cent year on year (YoY) decline in consolidated net profit at Rs 595.96 crore in July-September quarter (Q2FY22), due to higher operational cost. The company had posted a profit of Rs 830.37 crore in the year-ago quarter.
The stock hit a five-month low and a quoted at its lowest level since May 25, 2021. It was trading lower for the eight straight days, falling 14 per cent during the period.
According to clarification, the consultancy charges paid to ex-employee was as per law and with necessary approvals taken from the audit company. Based on available information, we do not see it as a major concern for the company, ICICI Securities said.
In Q2FY22, Asian Paints profit before depreciation, interest, tax and other income (PBDIT) margin declined to 12.73 per cent from 23.64 per cent in Q2FY21. Steep inflation seen in raw material prices, since the beginning of this calendar year, has been phenomenal and has impacted gross margins across all businesses in the quarter, the company said. The management said the company have taken a series of price increases and would look at further price increase to mitigate the impact of this persistently high inflation and are confident that the company should be able to turn this around strongly in the coming quarter.
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