Akzo Nobel India has reported a decline in quarterly profit, primarily attributed to weak retail demand and increased raw material costs. The paints and coatings manufacturer announced a 20.6% decrease in consolidated net profit for the June quarter, landing at ₹91 crore, compared to ₹114.6 crore in the corresponding period last year.

Financial Performance

The company's consolidated revenue from operations also saw a dip, coming in at ₹995.1 crore compared to ₹1,036.3 crore in the same quarter of the previous fiscal year. Despite the lower sales, total expenses were marginally reduced to ₹881.6 crore from ₹891.7 crore year-on-year. In the fourth quarter ended March 31, 2025, the company reported a marginal decline in consolidated net profit at Rs 108.4 crore.

For the quarter ended December 2024, Akzo Nobel India's net profit stood at ₹108.6 crore, a 4.56% decrease compared to the ₹113.8 crore reported in the same period the previous year. However, revenue from operations saw a slight increase of 1.72%, rising to ₹1,050.5 crore from ₹1,032.7 crore.

Factors Affecting Profitability

• Tepid Consumer Demand: Akzo Nobel India has pointed to subdued market conditions and weak consumer demand in the retail sector as significant factors impacting their financial performance.
• Increased Competition: Heightened competition in the market has also contributed to the pressure on sales and profitability.
• Rise in Raw Material Costs: An increase in the cost of raw materials has further squeezed profit margins for the company.

Company Initiatives and Strategies

Despite the challenges, Akzo Nobel India is actively pursuing strategies to maintain growth and profitability. These include:

• Focus on B2B Segment: The company's business-to-business (B2B) segment has continued to exhibit strong growth, providing a cushion against the weak retail performance.
• Premiumization in Retail: Akzo Nobel India is focusing on expanding its presence in the premium product category and in urban centers within the retail sector.
• Investments in Growth Initiatives: The company is maintaining investments in various growth initiatives to drive future expansion.

Special Dividend

In a move to reward shareholders, Akzo Nobel India's board has approved a one-time special interim dividend of ₹156 per share. This decision is partly based on income from a slump sale previously approved by shareholders.

Recent Developments

• JSW Paints Stake Acquisition: JSW Paints is set to acquire a 74.76% stake in Akzo Nobel India for ₹8,986 crore, followed by an open offer to buy an additional 25% stake from the public market for up to ₹3,929.06 crore.
• Sale of Powder Coatings Business and R&D Center: Akzo Nobel India is exploring the sale of its powder coatings business and R&D operations to an indirect wholly-owned subsidiary of Akzo Nobel N.V..

Market Context

The paints and coatings industry in India is estimated to be worth USD 8.5 billion in value and 6.3 million MTPA by volume. The architectural sector constitutes approximately 70% of the paint industry, while the industrial segment accounts for the remaining 30%.