Asian Paints Posted Moderate Growth In March 2015

Asian Paints operates in Paints and Pigments sector, and is the India's largest paint company and Asia’s third largest paint company. Asian Paints operates in 19 countries and has 26 paint manufacturing facilities in the world servicing consumers in over 65 countries. Asian paints ranked among the top ten Decorative coatings companies in the world. 

Asian Paints recently announced its forth qaurter result and financial year result for FY15. As per full one year performance of the company, the income from operations incresed by 11.5 per cent to Rs. 14,182.8 crores in FY15 from Rs. 12,714.8 crores in FY14. Sales increased by 13 per cent in the Paint segment which contributes almost 98.56 per cent to total revenue, and 154 per cent in Home Improvement segment which contributes just 1.44 per cent to total revenue in the  FY15. The considerable growth in Home improvement segment was predominantly because of the compnay’s acquisition of the entire front end sales business including brands, network and sales infrastructure of Ess Ess Bathroom st Products.

As per the company’s management, the Automotive Coatings, Industrial Coatings witnessed good growth in the fourth quarter particularly in the Industrial Liquid Paints category. However, the business conditions for the Automotive coatings business impacted due to lower growth in Automotive sale.

The expenses also incresed including employee benifit expense, depreciation and other expenses. The total expense increased by 11.41 per cent to Rs. 12213.32 crore in FY15 from Rs. 10962.58 crore in previous year. The Employee Benefits expense increased by 19 per cent but still it is lower due to the reduction in provision for retirement benefits as the yield of the government bonds used to discount the post-employment benefit obligations. Depreciation incresed by 8.25 per cent due to 5 per cent increment in fixed assets and Company has reassessed the estimated useful life of certain class of assets through technical evaluation during the year. Other Expenses include expenditure of Rs 7.62 crore towards Corporate Social Responsibility which was Rs. 3.13 crores last year, taking other expenses to grow by 17.29 per cent on yearly basis.

The EBITDA increased by 11.9 per cent to Rs. 2,235.4 crores as compared to Rs. 1,997.9 crores of the previous year. EBITDA margin increased by 8 basis points in FY15 to 15.89 per cent. The marginal improved in profitability was due to falling raw material prices and this year International business performed well amidst challenging market conditions in some key markets like Egypt. The company’s other income incresed by 26 per cent to Rs 170 crore this year despite of other income for the last year included dividend of Rs 26 crores from its wholly owned subsidiary of Asian Paints (International) against Nil in current year.

Finance cost during FY15 decreased by 18 per cent on yearly basis. The exeptional items increased by 177 per cent beacuse the Company has recognized a Voluntary Retirement / Separation Scheme worth Rs 25.16 crores and provision of Rs 2.41 crore for impairment in Fixed Assets, after closing of plant at Bhandup. The net Profit of the company increased by 14.47 per cent to Rs. 1395 crore in FY15 from Rs. 1219 crore previous year.

In the forth quarter, company acquired controlling stake in Kadisco, one of the leading paint companies in Ethiopia. The compay's new shareholding pattern indicates the FII holdings increased by 84 basis points to 18.09 per cent and DII holding decreased by 105 basis points to 8.81 per cent during March 2015 quarter.