Akzo Nobel India Ltd's Q2FY19 standalone net profit declines 4.9% yoy to Rs36.7cr : Misses Estimates

The company’s standalone revenue stood at Rs713.8cr, up 8.4% yoy but flat sequentially

Nov 03, 2018 05:11 IST India Infoline Research Team

Akzo Nobel India Ltd Q2FY19

Standalone Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 713.8 8.4
EBITDA 65.2 4.2
EBITDA Margin (%) 9.1 [36]
Net Profit (adjusted) 36.7 [4.9]
***EBITDA margin change is bps
Akzo Nobel India Limited (Akzo) reported subdued numbers for the quarter; though it met the revenue estimate, PAT was a miss. Revenue for the quarter was up by 8.4% yoy to Rs713.8cr, in-line with the consensus estimate. Due to higher raw material cost, company witnessed 353bps yoy decline in the gross margin. However, the same has been offset to a large extent by 266bps yoy decline in the other expenses. Thus, company reported EBITDA of Rs65.2cr, up 4.2% yoy (in-line with estimate) with an EBITDA margin of 9.1%, marginal contraction of 36bps yoy. PAT for the quarter stood at Rs36.7cr, decline of 4.9% yoy (~6% lower than the estimate).
  • Company reported 353bps yoy contraction in the gross margin on account of higher raw material costs (crude derivatives and impact of rupee depreciation), and unfavourable product mix.
  • Company’s PAT declined by 4.9% yoy due to higher tax incidence in the quarter. Tax rate for the quarter stood at 36.9% against 29.5% in Q2FY18. Base quarter included a tax refund.   

Technical View:

Akzo Nobel India Ltd ended at Rs. 1,552.25, up by 9.9 points or 0.64% from its previous closing of Rs. 1,542.35 on the BSE.
The scrip opened at Rs. 1,566.95 and touched a high and low of Rs. 1,575.90 and Rs. 1,548 respectively. A total of 23,147 (NSE+BSE) shares were traded on the counter. The stock traded above its 200 DMA.

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