Mon Jan 29, 2007 7:01 PM IST
MUMBAI (Reuters) - Asian Paints Ltd. on Monday reported its net profit growth eased to 7 percent on year in October-December, as festival demand had advanced to the second quarter, a top official said on Monday.
In July-September, the company had reported a 27 percent rise in net profit.
"The bulk of festival sales took place in the second quarter ahead of Diwali, which fell in October this year," Vice-Chairman and Managing Director Ashwin Dani told Reuters.
Consolidated net profit reached 653.15 million rupees, while total income rose 13 percent to 7.17 billion rupees in October-December.
Dani said operating margins continued to be hit by rising raw material costs, but the company did not pass on the entire burden to customers, careful not to lose buoyant construction sector-led demand.
The company had raised prices in October in the decorative paints segment, which it dominates. It recently raised prices again by 1.5 percent in mid-January.
OVERSEAS BUSINESS MIXED
Asian Paints reported a sales growth of over 30 percent from its international business, but this was mainly from the Middle-East, where it is present mostly through subsidiary Berger International Ltd.
However, its businesses continued to lose money in China and South East Asia, where the company was a small player, Dani said.
"We have an insignificant presence in China, Malaysia, Thailand and will have to review the strategy in these markets in the next three to six months," Dani said.
Another company official said this would involve either acquiring firms to boost size, or getting out of the markets altogether.
Dani said the company was also considering getting out of the Australian market and concentrate only on developing countries, he added.
Asian Paints shares ended 1 percent lower at 790.50 rupees in a weak Mumbai market.
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