BENGALURU (Reuters) -India's top paint maker Asian Paints Ltd reported a smaller-than-expected rise in third-quarter profit on Thursday, as an extended monsoon season dampened festive demand in October.
The Mumbai-based company's consolidated net profit rose 5.6% to 10.73 billion rupees ($131.90 million) in the three months ended Dec. 31. Analysts, on average, had expected a profit of 11.60 billion rupees, according to Refinitiv IBES data.
Extended monsoon in October affected retailing in the peak festival season, Asian Paints Chief Executive Amit Syngle said in a statement, adding that volumes in the domestic decorative business was flat.
Demand for paints, however, picked up in November and December, leading to double-digit growth in the decorative paint business, the company said.
Asian Paints dominates nearly half of the domestic paints sector and the decorative paint segment accounts for about 80% of the company's revenue.
Consolidated revenue from operations climbed 1.3% to 86.37 billion rupees from a year ago, while input costs fell 6.6% to 38.16 billion rupees helped by a pullback in crude prices.
Oil prices dropped about 2.5% in the December quarter and retreated 38.25% from its 2022 high of $139.13 per barrel by end of the year.
The crude by-products account for nearly 30% of total raw material costs for paint companies, which grappled with high costs over the past few quarters as oil prices stood at elevated levels.
Earnings before interest, tax, depreciation and amortisation (EBITDA) margins expanded to 18.64% from 18.08% last year, despite rising employee costs due to lower raw material costs.
The company's shares fell as much as 1.19% to 2,909.70 rupees as of 1:56 p.m IST.
(Reporting by Bharath Rajeswaran in Bengaluru in Bengaluru; Editing by Eileen Soreng)