Asian Paints Q4 Results: Misses estimates with one-time exceptional loss
Asian Paints misses estimates with one-time exceptional loss.
Increase in revenue: The consolidated revenue for Asian Paints rose by 20.6% YoY to Rs 7,889.94 crore in Jan-Mar 22 period. From the last quarter (Q3FY22), the revenue has declined from Rs 8,527 crore. It was yet another quarter of solid double-digit value growth across all businesses.
Net profit below estimates: The net profit was flat YoY and declined quarter-on-quarter to Rs 850.42 crore in the period between Jan-Mar 22 period. The net profit is below the analyst forecast of Rs 923 crore. In the year-ago period, the net profit was Rs 923 crore.
The profit is lower due to an exceptional loss of Rs 115.70 crore towards Sri Lanka business and an expected delay in receivable subsidy from the government.
PBDIT and margins: PBDIT (Profit before depreciation, interest, tax, other income, and exceptional items) increased by 9.5% to Rs 1,443.29 crores from Rs 1,318.26 crore in the year-ago period.
The margin was down by 150 bps year-on-year to 18.3% in the quarter ended March 2022, hit by higher input cost but the same sequentially improved by 22 bps. Profit before exceptional items and tax increases by 12.8% to Rs 1,304.88 crores from Rs 1,156.31 crore.
Domestic and International Business: The industrial coating business ended Q4FY22 with another round of robust double-digit revenue growth. 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 double-digit revenue growth for the quarter despite severe challenges in key markets.
Update on Sri Lankan Business: The current economic crisis in Sri Lanka has led to currency devaluation. This has resulted in the recognition of an exceptional item of Rs 48.50 crore towards exchange loss arising on foreign currency obligations of Causeway Paints Lanka Limited (Causeway Paints). Consequent to the currency devaluation, a foreign currency translation loss of Rs 139.87 crores is reported by the company.
Dividend: The Management commentary: company has announced a final dividend of Rs 15.50. The total dividend for the financial year ended March 31, 2022, aggregates to Rs 19.15, including the interim dividend paid last year.
"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." Amit Syngle, Managing Director & CEO, Asian Paints.
The stock price closed at Rs 3091 up 2.85% post the result on Tuesday afternoon.