Goodlass Nerolac paints has posted a 15% rise in turnover even as its bottom line has grown by 18%. The company, in a meet with analysts, has reiterated its desire to focus on the decorative paints segment even as it consolidates its position in the industrial paints segment.
Goodlass Nerolac is the market leader in the industrial segment with a 40% market share. Recently, the Tata group sold its 29% stake in the company to Kansai Paints Limited, Japan, at Rs 250 per share. The company meets nearly 70% of the demand for industrial paints. Its client list includes Maruthi, Honda, Toyota, Mahindra Ford, Whirlpool, Tata Chemicals, Bajaj, Hero Honda, Godrej GE, TVS Suzuki and Indian Hotels Limited.
The company is also planning to consolidate its position in the decorative paint segment with the installation of computerized colour dispensers at various locations in the country, to bring the customers close to the company. The company currently has 10,700 dealers and is widening the network to tap the rural market as well.
The sales for the company are up 15% to Rs 6,292 m for FY00. The company is currently running at 53% (44% in FY99) capacity. It has posted an 18% growth in bottom line for FY00. The growth in PAT has been limited by the increase in tax outflow.
Goodlass Nerolac has envisaged the following as their focus areas
1. A market share of 25% and revenues of Rs 12,000 crores by FY03.
2. To focus on the decorative segment, where the company intends to consolidate its position, by installing computerized colour dispensers.
3. To concentrate on new technology and applications segments like plastics, coils and can coating,
4. To service the general industrial and auto ancillary segment needs, which is not serviced to the potential and
5. To improve the operational efficiency of the company through cost reduction and by enhancing productivity
6. To spend Rs 30 to Rs 40 million in research and development
Through a proper customer relationship management and ERP implementation the company intends to fix the delivery problem that it is facing currently.
With the passenger car sales showing a good demand growth, the company should post better growth in topline. Further, the cost control measures along with the efficient distribution strategies initiated should help in improving profit margins.
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