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Results
09-Nov-24
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Analysis
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Asian Paints
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Challenging demand conditions
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Net
sales (including other operating income) of Asian Paints has declined 5.32% to
Rs 8027.54 crore. Operating profit
margin has declined from 20.24% to 15.44%, leading to 27.78% decline in operating
profit to Rs 1,239.51 crore. Raw
material cost as a % of total sales (net of stock adjustments) increased from
45.40% to 48.81%. Purchase of finished
goods cost rose from 12.00% to 12.05%.
Employee cost increased from 6.91% to 8.09%. Other expenses rose from 15.81% to
16.23%.
Decorative
Business (India) registered volume decline of 0.5% with revenue decline of
6.7%. Weak consumer sentiments coupled with persistent rains through the
quarter and floods in some parts of the country impacted consumption. Revenue
was affected by price cuts taken last year, shift in mix and increased rebates.
Impact of price increases implemented during Q2 are expected to flow through in
the 2nd half of the year.
Industrial
Business registered decent growth supported by the General Industrial,
Protective Coatings and Refinish segments.
All
categories in the Home Décor business benefited from synergies with our
Beautiful Homes stores network, though at a lower clip than expectations.
Considering the past performance and revised business plans, we have taken a
prudent assessment of our investments in White Teak and Weatherseal and taken
an impairment loss in their investment value during the quarter.
International
business registered a marginal value decline despite some challenging market
conditions in Ethiopia and Bangladesh. Though on a constant currency basis, the
international portfolio delivered revenue growth of 8.7% for the quarter
Other
income rose 5.05% to Rs 173.55 crore.
PBIDT fell 24.89% to Rs 1413.06 crore.
Provision for interest rose 23.79% to Rs 63.01 crore. Loan funds rose to Rs 2,516.02 crore as of 30
September 2024 from Rs 2,326.77 crore as of 30 September 2023. Inventories rose to Rs 6,474.40 crore as of
30 September 2024 from Rs 6,081.56 crore as of 30 September 2023. Sundry debtors were higher at Rs 4,701.41
crore as of 30 September 2024 compared to Rs 4,446.94 crore as of 30 September
2023. Cash and bank balance rose to Rs
800.50 crore as of 30 September 2024 from Rs 758.46 crore as of 30 September
2023. Investments declined from Rs
4,641.33 crore as of 30 September 2023 to Rs 3,694.62 crore as of 30 September
2024.
PBDT
fell 26.25% to Rs 1350.05 crore.
Provision for depreciation rose 15.94% to Rs 241.99 crore. Fixed assets increased to Rs 9,470.02 crore
as of 30 September 2024 from Rs 7,502.11 crore as of 30 September 2023. Intangible assets declined from Rs 800.86
crore to Rs 680.77 crore.
Profit
before tax down 31.68% to Rs 1,108.06 crore.
Share of profit/loss was 6.83% higher at Rs 31.12 crore. Provision for tax was expense of Rs 265.38
crore, compared to Rs 418.55 crore.
Effective tax rate was 27.67% compared to 25.35%.
Net
profit attributable to owners of the company decreased 42.37% to Rs 694.64
crore.
Management comment
‘’The
paint industry faced a subdued demand environment during the quarter. Domestic
Decorative coatings segment volumes declined marginally while overall domestic
coatings revenue declined by 5.5% for the quarter impacted by muted consumer
sentiments and extended rains and floods in some parts of the country.
Operating margins were impacted by the price reductions taken last year, higher
material prices and increased sales expenses. While we took price increases
during the quarter, full impact of the same should flow through only in the
second half of the year.
The
Industrial Business did relatively better with single digit value growth
supported by growth in the General Industrial, Protective Coatings and Refinish
segments. We continued to register growth in our Home Décor categories across
our Beautiful Homes Stores network, introducing new collections & product
solutions. International Business portfolio registered a marginal decline in
revenues for the quarter (8.7% growth in constant currency terms) despite
unfavorable market conditions in certain key markets like Ethiopia and
Bangladesh.
On
the margin front, soft demand conditions, product mix and material price
inflation affected margins in Q2. We expect margins to recover in the coming
quarters on the back of anticipated softening in material prices coupled with
price increases implemented in the last few months.
While
demand conditions remain challenging, we continue to direct our efforts towards
leveraging our brand strength, robust supply chain and distribution network to
pursue growth” said Amit Syngle,
Managing Director & CEO of Asian Paints Limited.
Equity
capital stood at Rs 95.92 crore as of 30 September 2024 to Rs 95.92 crore as of
30 September 2023. Per share face Value
remained same at Rs 1.00.
Promoters’
stake was 52.63% as of 30 September 2024 ,compared to 52.63% as of 30 September
2023 . Promoters pledged stake was 7.70%
as of 30 September 2024 ,compared to 6.49% as of 30 September 2023.
Segment Highlights
International business
Sales
decreased in Q2 FY25 by 0.7% to Rs 769.5 crores from Rs 775.0 crores on the
back of macro-economic and currency devaluation in Ethiopia, Egypt and
Bangladesh. In constant currency terms, sales increased by 8.7%. PBT in Q2 FY25
was a loss of Rs 21.5 crores as against profit of Rs 40.4 crores in the
corresponding period of previous year. Sales decreased by 1.5% in H1 FY’25 to Rs
1,448.6 crores from Rs 1,470.1 crores. PBT loss of Rs 15.0 crores in H1 FY’25
from profit of Rs 66.9 crores in the corresponding period of previous year.
Home Décor business
Bath
fitting sales increased in Q2 FY25 by 2.1% to Rs 83.1 crores from Rs 81.4
crores. PBDIT loss in Q2 FY25 was Rs 5.8 crores against loss of Rs 2.1 crores
in the corresponding period of the previous year. Sales increased by 6.3% in H1
FY’25 to Rs 176.6 crores from Rs 166.1 crores. PBDIT loss was Rs 7.1 crores in
H1 FY’25 as against loss of Rs 2.9 crores in the corresponding period of
previous year.
Kitchen
business sales increased in Q2 FY25 by 8.8% to Rs 105.3 crores from Rs 96.8
crores. The business had PBDIT loss of Rs 0.1 crores in Q2 FY25 as against
profit of Rs 0.9 crores in the corresponding period of previous year. Sales
increased by 6.7% in H1 FY’25 to Rs 205.7 crores from Rs 192.8 crores. The
business achieved PBDIT of Rs 0.8 crores as against Rs 1.6 crores.
Sales
at White Teak in Q2 FY25 increased by 19.2% to Rs 31.1 crores. Sales at
Weatherseal increased by 4.8% to Rs 13.2 crores. Sales at White Teak increased
by 16.8% in H1 FY’25 to Rs 60.8 crores. Sales at Weatherseal increased by 10.4%
in H1 FY’25 to Rs 24.7 crores. Both these acquisitions are gaining from
synergies with the Asian Paints network.
Industrial business
APPPG:
Sales increased in Q2 FY25 by 6.0% to Rs 265.5 crores from Rs 250.6 crores. PBT
in Q2 FY25 was Rs 18.5 crores as against Rs 28.4 crores in the corresponding
period of previous year. APPPG Sales increased by 2.6% in H1 FY’25 to Rs 558.7
crores from Rs 544.8 crores. PBT decreased to Rs 48.3 crores in H1 FY’25 as
against Rs 67.5 crores in the corresponding period of previous year.
PPGAP
Sales increased in Q2 FY25 by 5.9% to Rs 524.4 crores from Rs 495.3 crores. PBT
in Q2 FY25 was Rs 82.5 crores as against Rs 77.1 crores in the corresponding
period of previous year. PPGAP Sales increased by 7.7% in H1 FY’25 to Rs
1,041.5 crores from Rs 967.2 crores. PBT was Rs 181.8 crores in H1 FY’25 as
against Rs 159.2 crores in the corresponding period of previous year.
For year-to-date
(YTD) results analysis
Net
sales (including other operating income) of Asian Paints has declined 3.76% to
Rs 16997.27 crore. Operating profit
margin has declined from 21.73% to 17.26%, leading to 23.56% decline in
operating profit to Rs 2,933.28 crore.
Raw material cost as a % of total sales (net of stock adjustments)
increased from 45.65% to 47.42%.
Purchase of finished goods cost rose from 10.82% to 11.40%. Employee cost increased from 6.52% to 7.85%. Other expenses rose from 15.08% to
16.29%.
Other
income fell 8.97% to Rs 329.76 crore.
PBIDT fell 22.30% to Rs 3263.04 crore.
Provision for interest rose 22.49% to Rs 118.39 crore. Loan funds rose to Rs 2,516.02 crore as of 30
September 2024 from Rs 2,326.77 crore as of 30 September 2023. Inventories rose to Rs 6,474.40 crore as of
30 September 2024 from Rs 6,081.56 crore as of 30 September 2023. Sundry debtors were higher at Rs 4,701.41
crore as of 30 September 2024 compared to Rs 4,446.94 crore as of 30 September
2023. Cash and bank balance rose to Rs
800.50 crore as of 30 September 2024 from Rs 758.46 crore as of 30 September
2023. Investments declined from Rs
4,641.33 crore as of 30 September 2023 to Rs 3,694.62 crore as of 30 September
2024.
PBDT
fell 23.36% to Rs 3144.65 crore.
Provision for depreciation rose 15.39% to Rs 469.69 crore. Fixed assets increased to Rs 9,470.02 crore
as of 30 September 2024 from Rs 7,502.11 crore as of 30 September 2023. Intangible assets declined from Rs 800.86
crore to Rs 680.77 crore.
Profit
before tax down 27.63% to Rs 2,674.96 crore.
Share of profit/loss was 13.44% higher at Rs 67.84 crore. Provision for tax was expense of Rs 682.21
crore, compared to Rs 948.67 crore.
Effective tax rate was 26.62% compared to 25.26%.Minority
interest decreased 69.23% to Rs 15.83 crore.
Net profit attributable to owners of the company decreased 32.34% to Rs
1,864.62 crore.
Equity
capital stood at Rs 95.92 crore as of 30 September 2024 to Rs 95.92 crore as of
30 September 2023. Per share face Value
remained same at Rs 1.00.
Promoters’
stake was 52.63% as of 30 September 2024 ,compared to 52.63% as of 30 September
2023 . Promoters pledged stake was 7.70%
as of 30 September 2024 ,compared to 6.49% as of 30 September 2023 .
Cash
flow from operating activities decreased to Rs 1,920.51 crore for YTD ended
September 2024 from Rs 3,350.69 crore for YTD ended September 2023. Cash flow used in acquiring fixed assets
during the YTD ended September 2024 stood at Rs 961.87 crore, compared to Rs
1,142.11 crore during the YTD ended September 2023.
The
scrip is currently trading at Rs 2769
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Asian Paints : Consolidated Results
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Particulars
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2409 (03)
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2309 (03)
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Var.(%)
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2409 (06)
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2309 (06)
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Var.(%)
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2403 (12)
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2303 (12)
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Var.(%)
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Net Sales (including other operating income)
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8,027.54
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8,478.57
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-5
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16,997.27
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17,660.88
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-4
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35,494.73
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34,488.59
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3
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OPM (%)
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15.4
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20.2
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17.3
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21.7
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21.4
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18.2
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OP
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1,239.51
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1,716.23
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-28
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2,933.28
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3,837.52
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-24
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7,584.98
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6,259.84
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21
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Other Inc.
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173.55
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165.2
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5
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329.76
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362.27
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-9
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687.96
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386.48
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78
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PBIDT
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1,413.06
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1,881.43
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-25
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3,263.04
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4,199.79
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-22
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8,272.94
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6,646.32
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24
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Interest
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63.01
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50.9
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24
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118.39
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96.65
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22
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205.17
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144.45
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42
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PBDT
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1,350.05
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1,830.53
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-26
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3,144.65
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4,103.14
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-23
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8,067.77
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6,501.87
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24
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Depreciation
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241.99
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208.72
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16
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469.69
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407.04
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15
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853
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858.02
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-1
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PBT
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1,108.06
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1,621.81
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-32
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2674.96
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3696.1
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-28
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7214.77
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5643.85
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28
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Share of Profit/(Loss) from Associates
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31.12
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29.13
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7
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67.84
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59.8
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13
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133
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93.85
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42
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PBT before EO
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1139.18
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1650.94
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-31
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2742.8
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3755.9
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-27
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7347.77
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5737.7
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28
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EO Income
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-180.14
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0
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-
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-180.14
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0
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-
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0
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-48.87
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-
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PBT after EO
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959.04
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1650.94
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-42
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2562.66
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3755.9
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-32
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7347.77
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5688.83
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29
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Taxation
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265.38
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418.55
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-37
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682.21
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948.67
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-28
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1790.08
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1493.5
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20
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PAT
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693.66
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1232.39
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-44
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1880.45
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2807.23
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-33
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5557.69
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4195.33
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32
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Minority Interest (MI)
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-0.98
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26.97
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LP
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15.83
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51.44
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-69
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97.46
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88.88
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10
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Net profit
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694.64
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1205.42
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-42
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1864.62
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2755.79
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-32
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5460.23
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4106.45
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33
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EPS (Rs)*
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#
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#
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#
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#
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56.9
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43.2
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Notes
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* EPS is on current equity of Rs 95.92 crore, Face value of Rs
1, Excluding extraordinary items.
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# EPS is not annualised
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bps : Basis points
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EO : Extraordinary items
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Figures in Rs crore
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Source: Capitaline Corporate Database
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