Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Asian Paints – Anchoring the show - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jun 10, 2000

    Asian Paints – Anchoring the show

    All paint majors had a good year in terms of demand thanks to the tax sops for the housing sector and the buoyant automobile industry growth. But one company stands out of its peers through its performance. Asian Paints Limited.

    Asian Paints the market leader in the paint sector has led the show for the year ended FY00 both on the sales growth and bottomline. The company’s has outperformed the market with a 23% increase in sales (4.2% for ICI India, 15% for Goodlass Nerolac) volumes, a record for last 20 years. But the value growth was lower (18%) since prices were reduced twice during the year. The company is planning to declare a bonus issue at the rate of 3:5.

    Powered performance…
    (Rs m) Asian Paints ICI Ind Goodlass
    Sales 10,662 8,999 6,292
    Other Income 136 56 -
    Expenditure 8,885 8,076 -
    Operating Profit (EBDIT) 1,777 923 -
    Operating Profit Margin (%) 16.7% 10.3% -
    Interest 203 155 -
    Depreciation 278 233 -
    Profit before Tax 1,432 591 423
    Other Adjustments - 52 -
    Tax 458 - 123
    Profit after Tax/(Loss) 974 643 300
    Net profit margin (%) 9.1% 7.1% -
    Earnings per share* 24.3 15.7 19.7

    The company’s bottomline has grown by 27% compared to Goodlass Nerolac’s 18% and ICI India’s 5%. The operating margin of the company has also improved from 14% to 17%, which is also healthier.

    Market View
    The company has targeted gross sales of Rs 2,100 m compared to the current sales of Rs 1,335 m by FY03. This seems to materialise taking into consideration the IT initiatives (ERP and SCM) taken by the company on the distribution front to minimise the cost on inventory and receivables. Though there were few hiccups on the reports of deficit rainfall, the southwest monsoon has not disappointed. The affected areas like Gujarat, Rajasthan and Andhra Pradesh are expected to see an average rainfall.

    Perhaps, the only apprehension is the depreciation in rupee. If the crude prices remain at the same rate combined with the depreciation in rupee, the company may have to increase the prices of paints, which may affect the sales. If on the other hand the company were not to pass on the hike in costs, the markets would suffer.



    Equitymaster requests your view! Post a comment on "Asian Paints – Anchoring the show". Click here!


    More Views on News

    Asian Paints: Destocking Ahead of GST Impair Sales Volumes (Quarterly Results Update - Detailed)

    Aug 17, 2017

    Asian Paints registers 20.1% YoY decline in profits during 1QFY18 with low single-digit volume growth in the decorative paints segment.

    Asian Paints: Good Performance Across Segments (Quarterly Results Update - Detailed)

    May 18, 2017

    Asian Paints registers 10.4% YoY growth in profits during 4QFY17 with double-digit volume growth in the decorative segment.

    Asian Paints: Volumes Weighed by Notebandi (Quarterly Results Update - Detailed)

    Feb 17, 2017

    Asian Paints has reported a 2.6% YoY increase in the topline and a 0.6% YoY decline in the bottomline during the quarter.

    Asian Paints: Prolonged Monsoon Impacts Volume (Quarterly Results Update - Detailed)

    Oct 28, 2016

    Asian Paints has reported a 10.2% YoY increase in the topline while the bottomline has grown by 18% YoY

    Asian Paints: A Robust Performance (Quarterly Results Update - Detailed)

    Aug 3, 2016

    Asian Paints has reported a 9.1% YoY increase in the topline while the bottomline has grown by 17.9% YoY.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 23, 2017 03:36 PM


    • Track your investment in ASIAN PAINTS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks


    Detailed Quarterly Results With Charts