Other income rose 184.64% to Rs 10.93 crore. Provision for interest rose 25.69% to Rs 7.78 crore. Provision for depreciation rose 25.55% to Rs 48.16 crore. Profit before tax grew 80.15% to Rs 168.44 crore. Provision for tax was expense of Rs 44.82 crore, compared to Rs 28.14 crore. Effective tax rate was 26.61% compared to 30.10%. Minority interest increased 64.52% to Rs -0.66 crore. Net profit attributable to owners of the company increased 84.89% to Rs 124.28 crore.

FY21 consolidated performance

Net sales (including other operating income) of Kansai Nerolac Paints has declined 3.90% to Rs 5074.25 crore. Operating profit margin has jumped from 15.24% to 17.01%, leading to 7.31% rise in operating profit to Rs 863.28 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 55.86% to 56.67%. Purchase of finished goods cost rose from 5.50% to 6.12%. Employee cost decreased from 5.93% to 5.88%. Other expenses fell from 17.33% to 14.67%.

Other income rose 49.67% to Rs 38.21 crore. Provision for interest rose 13.53% to Rs 23.74 crore. Loan funds rose to Rs 262.75 crore as of 31 March 2021 from Rs 237.01 crore as of 31 March 2020. Inventories rose to Rs 1,197.93 crore as of 31 March 2021 from Rs 1,008.35 crore as of 31 March 2020. Sundry debtors were higher at Rs 956.35 crore as of 31 March 2021 compared to Rs 786.98 crore as of 31 March 2020. Cash and bank balance declined from Rs 192.03 crore as of 31 March 2020 to Rs 124.53 crore as of 31 March 2021. Investments rose to Rs 669.01 crore as of 31 March 2021 from Rs 305.95 crore as of 31 March 2020 .

Provision for depreciation rose 16.31% to Rs 165.3 crore. Fixed assets increased to Rs 2,099.26 crore as of 31 March 2021 from Rs 2,055.71 crore as of 31 March 2020. Intangible assets stood at Rs 19.78 crore.

Profit before tax grew 6.82% to Rs 712.45 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 186.73 crore, compared to Rs 151.18 crore. Effective tax rate was 26.21% compared to 22.67%.

Minority interest increased 23.14% to Rs -4.02 crore. Net profit attributable to owners of the company increased 1.68% to Rs 529.74 crore.

Promoters' stake was 74.99% as of 31 March 2021 compared to 74.99% as of 31 March 2020 .

Cash flow from operating activities increased to Rs 645.87 crore for year ended March 2021 from Rs 595.07 crore for year ended March 2020. Cash flow used in acquiring fixed assets during the year ended March 2021 stood at Rs 103.79 crore, compared to Rs 242.12 crore during the year ended March 2020.

Commenting on the results, Mr. H. M. Bharuka, Vice Chairman and Managing Director, Kansai Nerolac Paints Ltd said, "The quarter saw continued strong demand for both Decorative and Industrial Paints. Both Decorative and Industrial witnessed high double-digit volume growth in the quarter. However, this number should be read on the low base of March last year when lockdown was announced.

The continued aggressive cost control program along with judicious management of overheads helped the company report a strong growth in EBITDA. RM prices has shown a very steep to rise during the quarter, and this has resulted in a sharp increase in material costs. Full impact of this is yet to be seen due to inventory. Inflation is likely to continue along with continued volatility in forex rates and supply chain tightness.

Company has already taken some price increase. Further increases will be taken going forward to compensate for the inflation.

Looking forward, the company is optimistic that demand would gain momentum, though in the short term the effect of the COVID 2nd wave has impacted demand across."

Outlook of Indian Paint Industry as per company

The size of domestic paint industry is estimated at Rs. 54000 crore as of March 2021. The good growth in infrastructure, core sector as well as automobile and real estate is likely to have a positive effect on the overall demand of paint for the industry in the long run.

The stock trades at Rs 566.