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Asian paints Limited Q4FY21 Conference Call Transcripts

Asian paints Limited Q4FY21 Conference Call Transcripts

Published on 19 May 2021 Views 39 Comments 0

Management Participants:

MR. Amit Syngle, MD & CEO

Mr. R.J. Jeyamurugan, CFO & Company Secretary

Mr. Parag Rane, GM – Finance

 

Q4FY21 Results:     

  • Strong growth momentum continued in Q4 following Q2 an Q3.
  • Strong performance continued in tier 2/3/4 markets.
  • Tier 1 and metro picked up further from Q3.
  • strong volume growth in each of the months in the quarter as well as low base of March 2021 (Overall volume growth in Q4 is 48%).
  • Material price inflation impacted gross margins adversely in Q4.
  • There has been 2.8% of price increase in Q1 of FY22.
  • In Q4, 48% of volume growth was recorded and 46% of value growth was recorded
  • There was 13% volume growth and 8% value growth in FY20-21
  • Double digit volume growth for all the units in foreign markets like Asia, Middle East, and Africa. Ethiopia, Indonesia were exceptions.
  • Product portfolio expansion initiatives working well in focus market.
  • Waterproofing and premium/luxury emulsion segment doing very well.
  • Revenue grew to Rs 729 crores which is up by 22% compared to last year.
  • In Q4, profit margins have been adversely affected by the inflation. PBT declined by 38.8% to Rs 34 crores.

 

Industrial business performance:

  • Auto sector sales and builds data exhibit a continued recovery momentum
  • Joint venture with PPG of USA, consisting of auto-OEM business (PPG-AP) and findustrial general protected business (AP-PPG). PPG-AP was affected last year but Q4 recorded good results its revenue increase by 39% to Rs 333 crores. AP-PPG business has been very strong. It grew by 63% to Rs 193 crores, but the overall year performance did not do very well for both businesses.
  • Sequential uptick in all business segment.
  • Robust performance in Q4 supported by strong growth across business segment
  • Strong double-digit value growth in Q4.
  • Growth supported by both industrial liquid paint and powder segment.
  • Sequential uptake continues in both the segment.
  • Profitability in Q4 adversely impacted due to higher material prices in both businesses.

 

 

 

 

Home Improvement business performance:

 

Kitchen business

  • Strong growth in Q4 supported by both components as well as full kitchen; full year double digit growth.
  • Project segment sequential up tick continued in Q4.
  • PBT level loss substantially lesser for full year (1%); supported by improving scale of business and cost optimisation.
  • Revenue has increased in Q4 by 84% to Rs 95 crores.
  • Full year loss at Rs. 21 crores vs Rs 41 crores loss last year.

 

      Bath business

  • Strong sequential pickup in demand across product segments continued in Q4; double digit growth recorded.
  • Project business sequential of tech continued in Q4.
  • Benefit of improving scale and cost optimisation for the year.
  • Revenue has increased in Q4 by 84% to Rs 93 crores.
  • Full real loss at Rs 7 crores versus Rs 29 crores loss last year.

 

Standalone financials:

  • In Q4, the revenue is up by 46% to Rs 5671 crores, PBDIT is up by 57% to Rs 1321 crores, PBT is up by 70% to Rs 1104 crores, PAT is up by 81% to Rs 820 crores. So, the overall performance of Q4 has been very strong.
  • In Q4, the PBDIT margin has gone up by 162 bps.
  • In FY21, the revenue is up by 8% to Rs 18,517 crores, despite the slowdown in first 2 quarters. PBDIT is up by 15% to Rs 4860 crores, PBT is up by 19% to Rs 4090 crores, PAT is up by 15% to Rs 3053 crores but because of the tax rate change the PAT would be closer to 19% so the overall performance of FY21 has been very good.
  • The PBDIT margin for FY21 has gone up by 173 bps.

 

Consolidated financials:

  • In Q4, the revenue is up by 43% to Rs 6651 crores, PBDIT is up by 52% to Rs 1400 crores, PBT is up by 65% to Rs 1156 crores, PAT is up by 81% to Rs 870 crores. So, the overall performance of Q4 has been very strong.
  • In Q4, the PBDIT margin has gone up by 120 bps.
  • In FY21, the revenue is up by 7% to Rs 21,713 crores, despite the slowdown in first 2 quarters. PBDIT is up by 15% to Rs 5187 crores, PBT is up by 18% to Rs 4304 crores, PAT is up by 15% to Rs 3207 crores but because of the tax rate change the PAT would be closer to 18% so the overall performance of Q4 has been very good.
  • The PBDIT margin for FY21 has gone up by 154 bps.

 

Strong returns:

  • The ROCE has gone up from 35.2% to 36.2%. ROE has gone up from 26.6% to 27.6%, the market cap has seen huge increase of 52% from 1598.5 to 2433.2 (market cap figures are in Rs. bn). 
  • The overall dividend pay-out this year was Rs 17.85, the final dividend pay-out was Rs 14.5. Pay-out was close to 56.1%.

 

 

 

Investing in Sustainable future:

  • 188% water replenishment with 58% reduction in specific non-process freshwater consumption
  • 34.7% reduction in specific electricity consumption.
  • 56% electricity consumption from renewable sources.
  • 75.9% reduction in specific effluent generation from baseline year 2013-14.
  • 65.3% reduction in specific emissions from baseline year 2013-14.

 

 

Strong social commitment:

  • Colour academies across the country to train the unemployed youth.
  • Touched the lives of about 1.68 lakhs people in terms of skilling them and providing livelihood.
  • Work in the field of education, health and hygiene, and water management.
  • Contribution to various state disaster management authorities and implementing agencies against COVID-19 pandemic.

 

Looking forward:

  • Uncertainty because of the rise with the second wave of COVID 19 seemingly far more widespread in India as well as some in international market, especially in south Asia.
  • Well positioned to capture the recovery cycle once we put this wave behind. Dynamic management in the evolving business conditions would be the key.
  • Elevated inflationary pressure on the raw material front posing a challenge. Significant increase in input prices since December 2020; uptrend continues.
  • Implemented One price increase effective 1st May 2021 of 2.8% at portfolio level.

 

 

 

 

 

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