- Continued momentum from last quarter i.e., Q4 FY20-21, witnessed in April 21. May’21 impacted with 2nd wave.
- June 21 witnessed an uptick with gradual withdrawal of restrictions.
- Material Prices seeing steep inflation since Q3 FY20-21. Q4 FY21 saw about 8%-10% inflation from previous quarter and material prices have seen a further inflation, of 13%-15% in Q1 FY22.
- Price increases implemented across businesses negating only a part of this impact. 3% Price increase taken in Q1.
- Growth this time led by T1/T2 centers unlike Q1 last year when T3/T4 grew faster given severe lockdown in T1/T2.
- There was 106% volume growth and 95% value growth in Q1FY22.
- Profit margins have decreased in Q1FY22 as compared to Q4FY21. Management has said that steep material inflation leaded to contraction in margin.
International business performance:
- Interrupted business conditions hurt the good momentum of last few quarters.
- Growth led by Asia & Middle East.
- Africa impacted by local challenges as well as steep inflation.
- Focused push on Waterproofing & increasing share of Premium / Luxury emulsions continues to yield strong results across markets.
Industrial business performance:
- Revenue growth coming off an extremely low base last year.
- Refinish Business faced challenges with body shops under timing restrictions
- Robust performance in Industrial Liquid Paints segment, even accounting the low base.
- Strong project orders in Protective coatings supporting growth.
- While Gross margins were impacted with material inflation, Profitability in both businesses supported by contained costs during the period.
Home Improvement business performance:
- Full Kitchen solutions leading growth.
- New full kitchen dealer openings, luxury offerings supporting growth.
- Supported by growth in Project’s segment.
- Strong collaboration with Decorative Projects.
- Losses at PBT level lower in both businesses over last year, due to improved scale.
- For the quarter ended June 30, 2021, Revenue from operations has increased by 91.1 % to Rs 5,585.36 crores from Rs 2,922.66 crores.
- Profit before depreciation, interest, tax and other income (PBDIT) for the group (before share in profit of associates) increased by 88.7% to Rs 913.56 crores from Rs484.25 crores. Profit Before Tax (PBT) increased by 154.6% to Rs 778.58 crores from Rs 305.76 crores.
- Net Profit after Minority Interest increased by 160.2% to Rs 568.50 crores as compared to Rs 218.45 crores in the previous corresponding period.
- Steep material inflation leading to contraction in Gross Contribution margin by 631 bps.
- Demand outlook looks positive, especially with 2nd wave abetting. Good monsoon forecast would further support demand, especially from rural sector
- Long Diwali season would help Sept-Oct 21 Retail. Critical to avoid 3rd wave / any further waves to retain full normalcy
- Some key raw materials showing early signs of softening; Will have to see this trend emerging more strongly
- Company has announced one more price increase effective 1st July of about 1% at portfolio level