Capitaline

Results 11-May-22

Analysis

Kansai Nerolac Paints

Weak operating performance

Kansai Nerolac Paints consolidated net sales increased 5.28% to Rs 1536.6 crore in Q4FY22 compared to Q4FY21. Operating profit margin has declined from 14.62% to 5.46%, leading to 60.68% decline in operating profit to Rs 83.92 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 62.27% to 68.69%. Purchase of finished goods cost rose from 5.52% to 5.79%. Employee cost increased from 5.02% to 6.40%. Other expenses rose from 13.56% to 14.13%.

PBIDT fell 63.03% to Rs 82.95 crore. Provision for interest rose 0.51% to Rs 7.82 crore. PBDT fell 65.31% to Rs 75.13 crore. Provision for depreciation fell 10.63% to Rs 43.04 crore.

Profit before tax was down 80.95% to Rs 32.09 crore. Provision for tax was expense of Rs 12.92 crore, compared to Rs 44.82 crore. Effective tax rate was 40.26% compared to 26.61%.

Minority interest decreased 742.42% to Rs -5.56 crore. Net profit attributable to owners of the company decreased 80.10% to Rs 24.73 crore.

Equity capital stood at Rs 53.89 crore as of 31 March 2022 to Rs 53.89 crore as of 31 March 2021. Per share face Value remained same at Rs 1.00.

Promoters’ stake was 74.99% as of 31 March 2022 compared to 74.99% as of 31 March 2021.

Commenting on the results, Mr. Anuj Jain, Managing Director, Kansai Nerolac Paints Ltd said, “The quarter witnessed impact in terms of demand for decorative on account of the steep price increase towards end of Q3 FY 21-22. In Automotive, Passenger Vehicles demand was good though impacted because of supply side constraints. On raw material costs, the quarter continued to witness inflationary pressures along with volatility in crude and exchange rates on account of the tough geo-political situation globally. Overall demand situation is expected to remain healthy, and company remains positive and well poised to do better. It is expected that price increases taken in FY 21-22 will accrue in the coming year. Company will strive for more price increases in Industrial.”

Full year results analysis

Net sales of Kansai Nerolac Paints have increased 25.52% to Rs 6369.35 crore. Operating profit margin has declined from 17.01% to 10.20%, leading to 24.78% decline in operating profit to Rs 649.36 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 56.67% to 64.82%. Purchase of finished goods cost fell from 6.12% to 6.03%. Employee cost decreased from 5.88% to 5.34%. Other expenses fell from 14.67% to 14.07%.

Other income fell 33.50% to Rs 25.41 crore. PBIDT fell 25.15% to Rs 674.77 crore. Provision for interest rose 20.43% to Rs 28.59 crore. Loan funds rose to Rs 318.71 crore as of 31 March 2022 from Rs 269.00 crore as of 31 March 2021. Inventories rose to Rs 1,629.55 crore as of 31 March 2022 from Rs 1,197.93 crore as of 31 March 2021. Sundry debtors were higher at Rs 1,093.33 crore as of 31 March 2022 compared to Rs 956.35 crore as of 31 March 2021. Cash and bank balance declined from Rs 124.53 crore as of 31 March 2021 to Rs 106.00 crore as of 31 March 2022. Investments declined from Rs 669.01 crore as of 31 March 2021 to Rs 210.54 crore as of 31 March 2022.

PBDT fell 26.38% to Rs 646.18 crore. Provision for depreciation rose 2.70% to Rs 169.77 crore. Fixed assets increased to Rs 2,200.96 crore as of 31 March 2022 from Rs 2,099.26 crore as of 31 March 2021. Intangible assets stood at Rs 19.78 crore.

Profit before tax down 33.13% to Rs 476.41 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 133.26 crore, compared to Rs 186.73 crore. Effective tax rate was 27.97% compared to 26.21%.

Minority interest decreased 290.80% to Rs -15.71 crore. Net profit attributable to owners of the company decreased 32.26% to Rs 358.86 crore.

Equity capital stood at Rs 53.89 crore as of 31 March 2022 to Rs 53.89 crore as of 31 March 2021. Per share face Value remained same at Rs 1.00.

Promoters’ stake was 74.99% as of 31 March 2022 compared to 74.99% as of 31 March 2021 .

Cash flow from operating activities decreased to Rs 24.77 crore for year ended March 2022 from Rs 645.87 crore for year ended March 2021. Cash flow used in acquiring fixed assets during the year ended March 2022 stood at Rs 219.01 crore, compared to Rs 103.79 crore during the year ended March 2021.

The stock trades at Rs 431.

Kansai Nerolac Paints : Consolidated Results
Particulars	2203 (03)	2103 (03)	Var.(%)	2203 (12)	2103 (12)	Var.(%)
Net Sales	1,536.60	1,459.57	5	6,369.35	5,074.25	26
OPM (%)	5.5	14.6		10.2	17.0
OP	83.92	213.45	-61	649.36	863.28	-25
Other Inc.	-0.97	10.93	-109	25.41	38.21	-33
PBIDT	82.95	224.38	-63	674.77	901.49	-25
Interest	7.82	7.78	1	28.59	23.74	20
PBDT	75.13	216.60	-65	646.18	877.75	-26
Depreciation	43.04	48.16	-11	169.77	165.3	3
PBT	32.09	168.44	-81	476.41	712.45	-33
Share of Profit/(Loss) from Associates	0	0		0	0
PBT before EO	32.09	168.44	-81	476.41	712.45	-33
EO Income	0	0		0	0
PBT after EO	32.09	168.44	-81	476.41	712.45	-33
Taxation	12.92	44.82	-71	133.26	186.73	-29
PAT	19.17	123.62	-84	343.15	525.72	-35
Minority Interest (MI)	-5.56	-0.66	742	-15.71	-4.02	291
Net profit	24.73	124.28	-80	358.86	529.74	-32
EPS (Rs)*	#	#		6.7	9.8
Notes
* EPS is on current equity of Rs 53.89 crore, Face value of Rs 1, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
Figures in Rs crore
Source: Capitaline Corporate Database

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