In Wednesday’s trading session, shares of India’s leading paint and decor company moved up by 3.7 percent to Rs. 3,014.4, after reports claimed that the company has hiked prices across its portfolio. 

At 02:29 p.m., the shares of Asian Paints Limited closed in the green at Rs. 3,006.8, up by 3.5 percent, as against its previous closing price of Rs. 2,905.2, with a market capitalisation of Rs. 2.88 lakh crore. 

What’s the news: 

Asian Paints has implemented a marginal price increase of 0.7-1 percent across its entire product range, according to CNBC reports. 

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This adjustment is in response to heightened input costs due to input cost inflation, a common strategy among paint manufacturers facing rising prices. 

During the March quarter, Asian Paints achieved a robust 10 percent growth in volume for its decorative business. However, the company reported a decline in revenue, which was primarily attributed to weak demand conditions. 

Additionally, there was a noticeable downtrading observed in the premium segment, where consumers opted for more affordable alternatives. Downtrading refers to customers shifting from higher-priced products to lower-priced options. 

Previous News: 

Earlier on 1st July, Asian Paints Limited notified the stock exchanges about the expansion of its Mysuru plant’s capacity to 6 lakh KL per annum, following approval from the Karnataka State Pollution Control Board in Bengaluru. 

Originally established on 18th September 2015, the paint manufacturing plant initially had a production capacity of 3 lakh KL per annum, which was operating at around 78 percent of its capacity. With the recent approval, the plant’s capacity has now been increased to 6 lakh KL per annum. 

This expansion was aimed to meet the company’s medium-term capacity needs, with an investment of approximately Rs. 1,305 crore, financed through internal accruals. 

Financial & Stock Performance: 

In terms of financials, the revenue from operations stood at Rs. 8,701.5 crore in Q4 FY23-24, falling by 0.6 percent YoY from Rs. 8,750.8 crore in Q4 FY22-23, while the after-tax profit grew by 1.3 percent to Rs. 1,275.3 crore from Rs. 1,258.4 crore, during the same period. 

Asian Paints maintains a positive outlook on rural markets and hence expects Q1 FY24-25 demand to be supported by this positive sentiment. 

The stock has delivered negative returns of nearly 10.5 percent in one year and around 11.8 percent of negative returns year-to-date. 

Shareholding Pattern: 

As per the shareholding pattern of March 2024, the Promoters hold a 52.63 percent stake in the company, Foreign Institutional Investors (FII) hold a 15.89 percent stake, while Retail Investors and Domestic Institutional Investors (DII) hold a 19.82 percent and 11.66 percent stake in Asian Paints, respectively. 

About the company: 

Asian Paints Limited is the largest integrated Home Décor player and is engaged in the business of manufacturing, selling and distribution of paints, coatings, products related to home décor, bath fittings and providing related services. 

Written by Shivani Singh 


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