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Asian Paints Q4FY16 consolidated net profit declines 20% yoy to Rs.408.75 crore :In line with estimates

The company’s consolidated revenue stood at Rs. 3,971.28 crore, up 12.34% yoy but down 4.54% qoq.

May 11, 2016 3:16 IST | India Infoline News Service
Asian Paints
Asian Paints, largest Indian paint company, reported consolidated net profit of Rs.408.75 crore for the quarter ended March 31, 2016, registering growth of 19.88% yoy, but decline of 11.77% qoq. The company’s revenue stood at Rs. 3,971.28 crore, up 12.34% yoy but down 4.54% qoq.

Its consolidated core operating profit of Rs. 703.70 crore for the quarter, clocked growth of 25.84% yoy but decline of 12.1% qoq. Operating profit margin for the current quarter at 17.72% expanded by 190 bps yoy but contracted by 152 bps qoq.

For the year ended March 31, 2016, the company reported consolidated net profit of Rs. 1,726.21 crore, growing by 23.73% yoy. Its consolidated revenue for the period stood at Rs. 15,537.71 crore, registering growth of 9.55% yoy.

Asian Paints core operating profit stood at Rs. 2,808.62 crore, recording growth of 25.64% yoy. Operating margin for the current period at 18% expanded by 225 bps yoy.

On standalone basis,Asian Paints Ltd, reported standalone net profit of Rs.386.95 crore for the quarter ended March 31, 2016, registering growth of 13.87% yoy, but decline of 7.47% qoq. The company’s revenue stood at Rs. 3,219.07 crore, up 11.5% yoy but down 5.98% qoq.

Its standalone core operating profit of Rs. 620.20 crore for the quarter, clocked growth of 23.86% yoy but decline of 13.21% qoq. Operating profit margin for the current quarter at 19.27% expanded by 193 bps yoy but contracted by 160 bps qoq.

For the year ended March 31, 2016, the company reported standalone net profit of Rs. 1,597.44 crore, growing by 20.34% yoy. Its standalone revenue for the period stood at Rs. 12,645.89 crore, registering growth of 8.56% yoy.

Asian Paints Ltd's core operating profit stood at Rs. 2,479.56 crore, recording growth of 23.33% yoy. Operating margin for the current period at 19.54% expanded by 228 bps yoy.

Asian Paints - Q4FY16 - broadly in-line result; margin zooms:

Asian Paints’ consolidated net sales grew by 12.3% to Rs. 3971 crore in-line with IIFL estimates. The company had reported 390bps expansion in Gross margin to 49% during the quarter. The EBIT margin of Paint division improved by 181bps to 18.1% and negative EBIT margin of Home improvement division declined to 20.5% in Q4FY16 as against 22.2% in Q4FY15, an improvement of 163bps. Despite other expenses shot up by 115bps, EBITDA margin improved by 190bps to 17.7%, 38bps lower than IIFL estimate of 18.1%.

PBT increased by 23.5% to Rs. 648 crore despite higher interest cost/depreciation cost by 44.9%/12.1%, respectively and other income declined by 19.8%. The company’s tax rate for the quarter stood at 34.8% as against 32.4% in Q4FY15 and 32.5% in Q3FY16, the PAT grew 19.9% to Rs 409 crore, 18.2% lower than IIFL estimate of Rs. 500 crore.

Result Highlights: (Rs. in crore)

Reported Results IIFL Estimates Variance (%)
Consolidated Revenue 3971.28 3943.84 0.70
Consolidated Net Profit 408.75 499.74 [18.21]

Bloomberg estimated the company’s consolidated net profit at Rs. 435.32 crore.

Corporate Action: The company's board of directors have recommended a payment of final dividend of Rs. 5.30  per equity share of the face value of Re. 1 each for the financial year ended 31" March, 2016. An interim dividend of Rs. 2.20  per equity share of the face value of t 1 each was declared at the Board Meeting held on 23'd October,2015 and the same was paid on 31" October,2015.

Stock Commentary:

Asian Paints Ltd is currently trading at Rs. 900.9, up by 2.25 points or 0.25% from its previous closing of Rs. 898.65 on the BSE.

The scrip opened at Rs. 895.9 and has touched a high and low of Rs. 909.4 and Rs. 886.55 respectively. So far 1542247(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 86198.51 crore.

The BSE group 'A' stock of face value Rs. 1 has touched a 52 week high of Rs. 924.65 on 05-Aug-2015 and a 52 week low of Rs. 693 on 16-Jun-2015. Last one week high and low of the scrip stood at Rs. 913.4 and Rs. 861.95 respectively.

The promoters holding in the company stood at 52.79 % while Institutions and Non-Institutions held 27.07 % and 20.14 % respectively.

The stock is currently trading below its 50 DMA.


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