Amit Jain, Chairman, AkzoNobel India comments:

Our transformation plans for creating a more fit-for-purpose organization are on track and I am glad that the new management team is taking steps in the right direction to improve profitability as per company's strategy. Considering the performance of the company, the Board has recommended a higher dividend of Rs 24 per share which will be paid after the approval of the shareholders. As part of ‘AkzoNobel Cares' program, we are proud to care for communities. We launched EHealth clinics in Begur and six adjoining villages of Hoskote (Bengaluru rural district) to provide access to healthcare to more than 1500 residents. This project won AkzoNobel's Global ‘Winning Together' Award.

We witnessed a strong growth in profitability led by improved product mix and effective cost management. The Company recently won the prestigious ‘Golden Peacock Innovative Product Award' 2019 for its premium exterior paint - Dulux Weathershield Flash, a first of its kind offering in the exteriors paint category that combines the benefits of paint and primer.

Performance for the quarter ended March 2019

For quarter ended March 2019, net sales rose 1% to Rs 705.58 crore compared to corresponding previous year period. Operating margins of the company rose 470 bps to 14.7% leading a 48% rise in operating profit to Rs 103.48 crore.

Cost of material consumed as a percentage of net sales (net of stock adjustment) fell 60 bps to 51.9%. Purchase of stock in trade increased 80 bps to 8%. Employee benefit expenses decreased 300 bps to 8% while other expenses decreased 150 bps to 18.3%.

Other income rose 19% to Rs 15.21 crore. Interest cost was Rs 0.76 crore compared to Rs 1.65 crore. Depreciation rose 23% to Rs 18.48 crore. PBT rose 51% to Rs 99.45 crore. Considering 80 bps fall in effective tax rate to 29.3% net profit rose 52% to Rs 70.34 crore.

Performance for year ended March 2019

For year ended March 2019, net sales rose 7% to Rs 2918.35 crore compared to corresponding previous year period. However company operating margins rose 70 bps to 11.7% leading a 14% increase in operating profit to Rs 342.3 crore.

Cost of material consumed as a percentage of net sales (net of stock adjustment) rose 210 bps to 51.1%. Purchase of stock in trade increased 30 bps to 7%. Employee benefit expenses decreased 120 bps to 9% while other expenses decreased 180 bps to 21.1%.

Other income fell 4% to Rs 42.22 crore. Interest cost was Rs 4.45 crore compared to Rs 3.5 crore. Depreciation rose 12% to Rs 65.16 crore. PBT before EO as a result rose 12% to Rs 314.91 crore. The company had an EO income of Rs 0.65 crore compared to EO income of Rs 2 crore in the corresponding previous year period both representing divestment provisions no longer required and accordingly written back. PBT after EO was up 11% to Rs 315.56 crore. Considering 580 bps rise in effective tax rate to 33.1% PAT rose 3% to Rs 210.98 crore.

The scrip is trading at Rs 1667 at BSE