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Asian Paints Q1 results: Key highlights from the company’s earnings concall

Revenue jumped 91.1 percent YoY to Rs 5,585.4 crore for the said quarter against Rs 2,922.7 crore in Q1FY21.

July 21, 2021 / 03:37 PM IST
 
 
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Asian Paints on July 20 said its June quarter net profit more than doubled to Rs 574.3 crore against Rs 219.6 crore year-on-year (YoY).

The profit figures saw a steep jump owing to the low base of last year.

However, the profit figure was below market expectations as a CNBC-TV18 poll of analysts had expected profit at Rs 721 crore for the quarter.

Revenue jumped 91.1 percent YoY to Rs 5,585.4 crore for the said quarter against Rs 2,922.7 crore in Q1 FY21. Revenue was slightly above the estimates of the CNBC-TV18 poll of Rs 5,550 crore.

Here are the highlights from Asian Paints' Q1 FY22 earnings call as compiled by Narnolia Financial Advisors:

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The company posted volume growth of 106 percent with 95 percent value growth during the quarter on the back of the lower base and better demand from Tier I/2 cities, which was up 25-30 percent from Tier 3/4 cities mainly impacted by second wave of the pandemic.

The company did well till April 20, 2021, post which, the demand took a hit amid state lockdowns. Also, the month of May remained muted and the business only in June, albeit strongly.

It witnessed very steep inflation to the extent of 13-15 percent during the quarter while the company hiked prices by 3 percent in Q1 FY22. It will also further price increase in July 2021.

During the quarter, the Southern market remained impacted strongly due to increased cases. Meanwhile, Eastern markets remained impacted due to Kolkata elections and also North East was subdued.

The exterior market saw robust growth with both government and institutions angling for infrastructure push. Waterproofing did well led by better demand from both retail and institutional customers. Going forward, the company will launch several products in the waterproofing segment. Wood finishing is also doing well as of now, the management said.

All Protekt (Fire Retardant Paint) which was launched in Q1 FY22 has done very well, also in the coming years, innovation and differentiated products will be the key growth driver for the company.

The company continued to add dealers in newer towns, added six new colour ideas stores, also 15 new stores are in the pipeline in beautiful homes stores while 18 stores are already functional.

The company has come up with wallpapers in the furnishing segment. It has also forayed into designer tiles and is seeing strong preference from some of the big retailers. The management is looking at expanding the designer tiles segment in a big way.

Safe painting is also doing well and also both variants of san assure are doing well.

Some regions in Maharashtra, Kerala and North-East are a bit subdued but the management expects them to stabilise with a pick up in vaccination drive.

The company has filed 20 new patents in FY21; to date, it has filed a total of 76 patents. The area of patenting gives an edge in terms of formulation and process with which a particular product is made by a particular manufacturer.

International Portfolio posted over 50 percent revenue growth over the last year led by Asia & Middle East while Africa remained impacted by local challenges as well as steep inflation.

Management would like to maintain PBDIT in the range of 19-21 percent going forward. Overall contribution from Home decor business will remain in single digits.
Moneycontrol News
first published: Jul 21, 2021 03:37 pm

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