Asian Paints

Stellar performance

Jul 20, 2021 08:07 IST capital market

Asian Paints consolidated net sales increased 91.11% to Rs 5585.36 crore in Q1FY22 compared to Q1FY20.  Sales of Paints segment has gone up 90.37% to Rs 5,464.66 crore (accounting for 97.82% of total sales).  Sales of Home Improvement segment rose 133.25% to Rs 121.50 crore (accounting for 2.18% of total sales). 

Operating profit margin has slumped from 16.57% to 16.36%, leading to 88.65% rise in operating profit to Rs 913.56 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 47.34% to 54.92%. Purchase of finished goods cost rose from 6.67% to 10.67%. Employee cost decreased from 12.71% to 6.93%.  Other expenses fell from 16.25% to 12.84%.  

Other income rose 90.30% to Rs 89.61 crore. Profit before interest, tax and other unallocable items (PBIT) has jumped 128.26% to Rs 799.88 crore. PBIT of Paints segment rose 117.74% to Rs 809.06 crore (accounting for 101.15% of total PBIT).  PBIT of Home Improvement segment fell 56.60% to Rs -9.18 crore (accounting for -1.15% of total PBIT). 

PBIT margin of Paints segment rose from 12.94% to 14.81%. PBIT margin of Home Improvement segment rose from negative 40.60% to negative 7.56%. Overall PBIT margin rose from 11.99% to 14.32%.

Provision for interest rose 6.71% to Rs 21.48 crore.  Provision for depreciation rose 4.93% to Rs 200.59 crore.  Profit before tax grew 144.06% to Rs 781.10 crore.  Share of loss of associate was Rs 2.52 crore compared to loss of Rs 14.28 crore.  Provision for tax was expense of Rs 204.28 crore, compared to Rs 86.15 crore.  Effective tax rate was 26.24% compared to 28.18%.

Minority interest increased 400% to Rs 5.80 crore. Net profit attributable to owners of the company increased 160.24% to Rs 568.50 crore. 

Promoters stake was 52.79% as of 30 June 2021 compared to 52.79% as of 30 June 2020.  Promoters pledged stake was 9.44% as of 30 June 2021 compared to 11.70% as of 30 June 2020.

Management comments

?The domestic decorative business more than doubled its volume and delivered stellar revenues over the lower base of last year which had suffered from the first nationwide lockdown. The business registered strong compounded average growths in value and volume in comparison with Q1FY20 which was a normal quarter, indicative of a strong consistent trajectory. The Industrial Business and the Home Improvement business also doubled its revenue on last years low base. International Business, which had seen some continuity of business in the first quarter of last year, registered strong double digit revenue growth. This has been a resilient performance across all businesses despite the challenges posed by the second Covid wave across markets, which disrupted business continuity from the second fortnight of April 2021. We registered strong growths in April 2021 and a robust resounding rebound in June 2021, post May 2021 which was impacted in a big way. Steep inflation in raw material prices in the last quarter of previous financial year and again in this quarter saw gross margins impacted across all businesses despite the price increases taken to mitigate this pressure to an extent. However, all businesses showed healthy profits compared to first quarter of last year and net profit more than doubled at both, Standalone and Consolidated levels. We continue to strongly engage with all our stakeholders and are confident of our organizations capability to maximize on the expected uptick in the business conditions as we move forward?, said Amit Syngle, Managing Director & CEO of Asian Paints Limited.

Full year results analysis

Net sales of Asian Paints have 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%.  

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 5,504.88 crore as of 31 March 2021.  Intangible assets increased from Rs 319.99 crore to Rs 536.62 crore. 

Profit before tax grew 19.33% to Rs 4,275.75 crore.  Share of profit of associate was 43.63% lower at Rs 28.6 crore.  Provision for tax was expense of Rs 1097.6 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. 

Cash flow from operating activities increased to Rs 3,683.35 crore for year ended March 2021 from Rs 3,038.15 crore for year ended March 2020.  Cash flow used in acquiring fixed assets during the year ended March 2021 stood at Rs 288.71 crore, compared to Rs 413.69 crore during the year ended March 2020. 

The scrip is currently trading at Rs 3159

 

 

Asian Paints : Consolidated Results

Particulars

2106 (03)

2006 (03)

Var.(%)

2103 (12)

2003 (12)

Var.(%)

Net Sales

5,585.36

2,922.66

91

21,712.79

20,211.25

7

OPM (%)

16.4

16.6

 

22.4

20.6

 

OP

913.56

484.25

89

4,855.60

4,161.77

17

Other Inc.

89.61

47.09

90

303.05

304.31

0

PBIDT

1,003.17

531.34

89

5,158.65

4,466.08

16

Interest

21.48

20.13

7

91.63

102.33

-10

PBDT

981.69

511.21

92

5,067.02

4,363.75

16

Depreciation

200.59

191.17

5

791.27

780.5

1

PBT

781.1

320.04

144

4,275.75

3,583.25

19

Share of Profit/(Loss) from Associates

-2.52

-14.28

82

28.6

50.74

-44

PBT before Tax

778.58

305.76

155

4304.35

3633.99

18

Taxation

204.28

86.15

137

1097.6

854.85

28

PAT

574.3

219.61

162

3206.75

2779.14

15

Minority Interest (MI)

5.8

1.16

400

67.46

69.02

-2

Net profit

568.5

218.45

160

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

EO : Extraordinary items

Figures in Rs crore

Source: Capitaline Corporate Database

 

 

Asian Paints : Consolidated Segment Results

 

% of (Total)

2106 (03)

2006 (03)

Var.(%)

% of (Total)

2103 (12)

2003 (12)

Var.(%)

Sales

Paints

98

5,464.66

2,870.57

90

97.66

21,205.73

19,753.57

7

Home Improvement

2

121.5

52.09

133

2.34

508.71

457.68

11

Total Reported Sales

100

5,586.16

2,922.66

91

100

21,714.44

20,211.25

7

Less: Inter segment revenues

 

0.8

0

-

 

1.65

0

-

Net Sales

 

5,585.36

2,922.66

91

 

21,712.79

20,211.25

7

PBIT

Paints

101

809.06

371.58

118

101

4,505.66

3,890.00

16

Home Improvement

-1

-9.18

-21.15

-57

-1

-27.63

-70.39

-61

Total PBIT

100

799.88

350.43

128

100

4,478.03

3,819.61

17

Less : Interest

 

0.49

0.27

81

 

9.88

1.66

495

Add: Other un-allcoable

 

-20.81

-44.4

-53

 

-163.8

-183.96

-11

PBT

 

778.58

305.76

155

 

4,304.35

3,633.99

18

 

 

 


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