Asian Paints Q1 PAT up 160.24% at Rs569cr yoy on higher volumes and sharper focus on decorative segment

Asian Paints Ltd reported 91.11% growth yoy in total sales revenues for the Jun-21 quarter on consolidated basis at Rs5,585cr

Jul 21, 2021 08:07 IST India Infoline News Service

Asian Paints Ltd reported 91.11% growth yoy in total sales revenues for the Jun-21 quarter on consolidated basis at Rs5,585cr. On a sequential basis, the revenues were down -16.03% compared to Rs6,651cr in the Mar-21 quarter on account of COVID 2.0 impact on output. Volumes of the decorative paints business were up 106% in Q1 while it was up 95% in value terms. The decorative paints volumes have grown at CAGR of 15.4% over last 4 years.

Some interesting trends in sales emerged in the first quarter. Growth was led by Tier1 and Tier2 centres, unlike previous year where the growth cam from Tier3 and Tier4 towns due to lockdowns in top cities. Asian Paint saw good traction on economy and luxury range; including large institutional sales. Among new products, Asian Paints is seeing good traction in smart care waterproofing, adhesives business as well as the wood finish category.

For the Jun-21 quarter, the consolidated operating profits were up 143.27% yoy at Rs713cr, but operating profits were lower sequentially due to COVID 2.0 impact. Gross margins actually fell by 500 bps to 39.6% in Q1 as 13-15% spike in material costs was only compensated up to 3% by price hikes. In the international businesses, the Africa and Asian businesses report loss before taxes due to the impact of spike in material costs.

Net profits for the Jun-21 quarter were up 160.24% on a yoy basis at Rs569cr even as sequential profits fell by -33.28% on COVID 2.0 effect. The spike in material costs was partially compensated by the surge in sales and cost controls implemented. The net margins at 10.88% in the Jun-21 quarter was higher yoy compared to 7.47% in Jun-20 quarter but lower than 12.81% recorded in sequential Mar-21 quarter.

Financial highlights for Jun-21 compared yoy and sequentially

Asian Paints
Rs in Crore Jun-21 Jun-20 YOY Mar-21 QOQ
Total Income (Rs cr) ₹ 5,585 ₹ 2,923 91.11% ₹ 6,651 -16.03%
Operating Profit (Rs cr) ₹ 713 ₹ 293 143.27% ₹ 1,105 -35.47%
Net Profit (Rs cr) ₹ 569 ₹ 218 160.24% ₹ 852 -33.28%
Diluted EPS (Rs) ₹ 5.93 ₹ 2.28 ₹ 8.88
OPM 12.76% 10.03% 16.61%
Net Margins 10.18% 7.47% 12.81%

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