Result-Analysis-Elite-Wealth
Result Analysis: Asian Paints Ltd. Result Update Q4FY22

 

Particulars (In Rs. Cr.) Q4FY22 Q3FY22 Q4FY21 QoQ %      YoY%
Revenue from Operations 7893 8527 6651 -7.4% 18.7%
Other Income 80.39 71.81 75.41 11.9% 6.6%
Total Income 7973 8599 6727 -7.3% 18.5%
Raw Material Consumed 4173 4085 3436 2.2% 21.5%
Raw Material as % of Sales 52.88% 47.91% 51.65% 497 bps 123 bps
Stock Adjustment -327.49 381.6 -327.43
Purchase of finished Goods 992.1 927.3 671.5 7.0% 47.7%
Employee Benefit Expenses 457.37 455.7 412.13 0.4% 11.0%
Other Expenses 1,153.96 1135.9 1,141.72 1.6% 1.1%
EBITDA 1443 1542 1318 -6.4% 9.5%
Finance Cost 23 27 29.9 -16.2% -24.2%
Depreciation 205.11 207.91 213.35 -1.3% -3.9%
Profit before exceptional Item and Tax 1296 1378 1150 -6.0% 12.7%
Share in profit of associates 8.93 14.96 5.85 -40.3% 52.6%
Exceptional Item 115.7
Tax 315.13 362.43 286.42 -13.1% 10.0%
Profit After Tax 874 1031 870 -15.2% 0.5%
EBITDA Margin 18.3% 18.1% 19.8% 21 bps (153) bps
PAT Margin 11.07% 12.09% 13.07% (102) bps (200) bps
Segment Revenue Q3FY22 Q3FY22 Q3FY21 QoQ %      YoY%
Paints 7,663.74 8319.4 6,467.20 -7.9% 18.5%
Home Improvement 232.36 209.3 185.88 11.0% 25.0%

Result Highlight: 

  • Consolidated Revenue of Asian Paints for Q4FY22 grew 18.7% YoY at Rs 7893 Crore beats the street estimates of Rs 7785 Crore. EBITDA up 9.5% YoY at Rs. 1443 Crore.

  • Sequentially Revenue and EBITDA fell 7.4% and 6.4% respectively.

  • Net profit down 15.2% QoQ and remained flat YoY to Rs 874 crore due to higher cost of Goods sold and exceptional item of Rs. 115.7 Crore in Q4FY22.

  • Exceptional items includes the following items:-

  • An amount of Rs. 73 crores computed under ‘expected credit loss’ method is recognized as an exceptional item towards subsidy receivable for earlier years.

  • Economic crisis in Sri Lanka has led to currency devaluation. This has resulted in recognition of an expense of Rs. 48.50 crores towards exchange loss arising on foreign currency obligations of Causeway Paints Lanka.

  • Impairment loss of Rs. 13.47 crores on assessment of the fair value of investment made in Causeway Paints.

  • EBITDA margin improved sequentially to 18.3% in Q4FY22 on calibrated price hikes of 15%

  • The domestic Decorative business grew strongly, registering 8% volume growth and 20% plus revenue growth on a high base.

  • The Board of Directors has recommended a final dividend of Rs. 15.50 per equity share (1550%).

 Management commentary: Amit Syngle, Managing Director &CEO 

  • The domestic Decorative business grew strongly, registering 8% volume growth and 20% plus revenue growth on a high base.

  • The International Business managed to deliver a double-digit revenue growth for the quarter despite severe challenges in key markets.

  • The Industrial Coatings business closed the quarter with another round of robust double digit revenue growth with continued momentum in the Protective Coatings segment.

  • The scale-up in the Home Décor business continued unhindered, making further inroads through network expansion and introduction of unique value propositions for its customers.

  • We continued to improve operating margins on a sequential basis which was a result of some calibrated price increases, driving the premium and luxury product growths, coupled with some strong work on driving operational efficiencies across businesses.

 Outlook:

Asian Paint reported volume growth of 8% in Q4FY22 on higher base of 48% in same quarter last year as business recovered from Pandemic. Margins are improved sequentially with multiple price hikes taken by the company during the quarter. The company continues to expand its categories from paints to overall home decoration segments which would help it to create new growth levers for future growth.

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