Asian Paints

48% volume growth in domestic decorative business

May 12, 2021 08:05 IST capital market

Asian Paints consolidated net sales increased 43.49% to Rs 6651.43 crore in Q4FY21 compared to Q1FY20. Sales of Paints segment has gone up 42.67% to Rs 6,467.20 crore (accounting for 97.21% of total sales). Sales of Home Improvement segment rose 80.98% to Rs 185.88 crore (accounting for 2.79% of total sales).  

Operating profit margin has jumped from 18.54% to 19.82%, leading to 53.35% rise in operating profit to Rs 1,318.26 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 48.88% to 49.23%. Purchase of finished goods cost rose from 8.10% to 9.62%. Employee cost decreased from 6.79% to 5.91%. Other expenses fell from 18.83% to 16.36%. Cost of Sales rose from 50.80% to 54.15%. Inventories cost fell from 6.21% to 4.70%.  

Other income rose 35.14% to Rs 75.41 crore. Profit before interest, tax and other unallocable items (PBIT) has jumped 56.49% to Rs 1,228.21 crore. PBIT of Paints segment rose 52.38% to Rs 1,229.72 crore (accounting for 100.12% of total PBIT). PBIT of Home Improvement segment fell 93.20% to Rs -1.51 crore (accounting for -0.12% of total PBIT).  

PBIT margin of Paints segment rose from 17.80% to 19.01%. PBIT margin of Home Improvement segment rose from negative 21.60% to negative 0.81%. Overall PBIT margin rose from 16.93% to 18.46%.  

Provision for interest rose 16.37% to Rs 29.86 crore. Provision for depreciation rose 9.69% to Rs 213.35 crore. Profit before tax grew 65.47% to Rs 1,150.46 crore. Share of profit/loss was 47.73% higher at Rs 5.85 crore. Provision for tax was expense of Rs 286.42 crore, compared to Rs 218.97 crore. Effective tax rate was 24.77% compared to 31.32%. Minority interest decreased 3.27% to Rs 17.76 crore. Net profit attributable to owners of the company increased 84.49% to Rs 852.13 crore.

FY21 consolidated performance 

Net sales of Asian Paints increased 7.43% to Rs 21712.79 crore. Sales of Paints segment has gone up 7.35% to Rs 21,205.73 crore (accounting for 97.66% of total sales). Sales of Home Improvement segment rose 11.15% to Rs 508.71 crore (accounting for 2.34% of total sales).

Operating profit margin has jumped from 20.59% to 22.36%, leading to 16.67% rise in operating profit to Rs 4,855.60 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 49.35% to 47.31%. Purchase of finished goods cost rose from 7.49% to 8.59%. Employee cost increased from 6.68% to 7.07%. Other expenses fell from 16.14% to 14.76%. Cost of Sales fell from 55.66% to 55.48%. Inventories cost fell from 1.17% to 0.42%.  

Other income fell 0.41% to Rs 303.05 crore. Profit before interest, tax and other unallocable items (PBIT) has jumped 17.24% to Rs 4,478.03 crore. PBIT of Paints segment rose 15.83% to Rs 4,505.66 crore (accounting for 100.62% of total PBIT). PBIT of Home Improvement segment fell 60.75% to Rs -27.63 crore (accounting for -0.62% of total PBIT).  

PBIT margin of Paints segment rose from 19.69% to 21.25%. PBIT margin of Home Improvement segment rose from negative 15.38% to negative 5.43%. Overall PBIT margin rose from 18.90% to 20.62%. 

Provision for interest fell 10.46% to Rs 91.63 crore. Loan funds declined from Rs 1,103.92 crore as of 31 March 2020 to Rs 1,084.77 crore as of 31 March 2021. Inventories rose to Rs 3,798.60 crore as of 31 March 2021 from Rs 3,389.81 crore as of 31 March 2020. Sundry debtors were higher at Rs 2,602.17 crore as of 31 March 2021 compared to Rs 1,795.22 crore as of 31 March 2020. Cash and bank balance declined from Rs 782.83 crore as of 31 March 2020 to Rs 610.75 crore as of 31 March 2021. Investments rose to Rs 4,736.80 crore as of 31 March 2021 from Rs 2,018.85 crore as of 31 March 2020 .

Provision for depreciation rose 1.38% to Rs 791.27 crore. Fixed assets declined from Rs 6,092.56 crore as of 31 March 2020 to Rs 5,738.87 crore as of 31 March 2021. Intangible assets declined from Rs 319.99 crore to Rs 302.63 crore.  

Profit before tax grew 19.33% to Rs 4,275.75 crore. Share of profit/loss was 43.63% lower at Rs 28.6 crore. Provision for tax was expense of Rs 1,097.60 crore, compared to Rs 854.85 crore. Effective tax rate was 25.50% compared to 23.52%. 

Minority interest decreased 2.26% to Rs 67.46 crore. Net profit attributable to owners of the company increased 15.84% to Rs 3,139.29 crore.  

Promoters stake was 52.79% as of 31 March 2021 compared to 52.79% as of 31 March 2020. Promoters pledged stake was 9.44% as of 31 March 2021 compared to 11.87% as of 31 March 2020.

Management comments 

We have seen a very strong quarter aided by good demand across rural and urban areas at the country level. On the heels of a healthy Q2 and Q3 recovery, this quarter saw exceptional growth across businesses and consumer segments. This quarter the performance has been outstanding, discounting even the slightly lower base last year same quarter. 

The domestic Decorative business delivered a stellar performance registering a 48% volume growth in the quarter, led by a robust growth in the premium and luxury product range. The Home Improvement business also grew in a big way, registering record sales for the quarter aided by the foray into the Home D?cor business. The Industrial coatings business delivered a robust performance, particularly in Protective coatings and Refinish segments supported by the uptick in the industrial activity. The International business continued to record an exceptional double-digit volume growth, led by good growth in Asia and Middle East. The huge inflationary trend in raw material prices has been worrying, however, its impact on profitability has been negated with some path-breaking work on sourcing and cost optimization. The current business environment is unprecedented, and we would continue to strongly engage with all our stakeholders taking all necessary measures to tackle this uncertainty said Amit Syngle, Managing Director & CEO, Asian Paints Limited. 

The scrip is currently trading at Rs 2556

Asian Paints : Consolidated Results

 

Particulars 2103 (03) 2003 (03) Var.(%) 2103 (12) 2003 (12) Var.(%)
Net Sales 6,651.43 4,635.59 43 21,712.79 20,211.25 7
OPM (%) 19.8 18.5 22.4 20.6
OP 1,318.26 859.62 53 4,855.60 4,161.77 17
Other Inc. 75.41 55.8 35 303.05 304.31 0
PBIDT 1,393.67 915.42 52 5,158.65 4,466.08 16
Interest 29.86 25.66 16 91.63 102.33 -10
PBDT 1,363.81 889.76 53 5,067.02 4,363.75 16
Depreciation 213.35 194.5 10 791.27 780.5 1
PBT 1,150.46 695.26 65 4,275.75 3,583.25 19
Share of Profit/(Loss) from Associates 5.85 3.96 48 28.6 50.74 -44
PBT before EO 1156.31 699.22 65 4304.35 3633.99 18
EO Income 0 0 - 0 0 -
PBT after EO 1156.31 699.22 65 4304.35 3633.99 18
Taxation 286.42 218.97 31 1097.6 854.85 28
PAT 869.89 480.25 81 3206.75 2779.14 15
Minority Interest (MI) 17.76 18.36 -3 67.46 69.02 -2
Net profit 852.13 461.89 84 3139.29 2710.12 16
EPS (Rs)* # # 32.7  28.3 
Notes
* EPS is on current equity of Rs 95.92 crore, Face value of Rs 1, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
Figures in Rs crore
Source: Capitaline Corporate Database

Consolidated Segment Results

 

Particulars 2103 (03) 2003 (03) % of (Total) Var.(%) 2103 (12) 2003 (12) % of (Total) Var.(%)
Sales
Paints 6,467.20 4,532.88 97 43 21,205.73 19,753.57 98 7
Home Improvement 185.88 102.71 3 81 508.71 457.68 2 11
Total Reported Sales 6,653.08 4,635.59 100 44 21,714.44 20,211.25 100 7
PBIT
Paints 1,229.72 807.03 100 52 4,505.66 3,890.00 101 16
Home Improvement -1.51 -22.19 0 -93 -27.63 -70.39 -1 -61
Total PBIT 1,228.21 784.84 100 56 4,478.03 3,819.61 100 17
Less : Interest 8.61 0.35 2360 9.88 1.66 495
Add: Other un-allcoable -63.29 -85.27 -26 -163.8 -183.96 -11
PBT 1,156.31 699.22 65 4,304.35 3,633.99 18

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