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Akzo Nobel India, a leading Paints and Coatings company and makers of Dulux Paints net sales fell 7% to Rs 727.03 crore for quarter ended December 2019 compared to corresponding previous year period. Operating margins of the company rose 310 bps to 16% leading a 15% rise in operating profit to Rs 116.05 crore.
Other income fell 27% to Rs 7.19 crore. Interest cost was Rs 3.08 crore compared to Rs 2.33 crore. Depreciation rose 17% to Rs 19.28 crore. PBT before EO rose 9% to Rs 100.88 crore. The company had EO income of Rs 3.49 crore during the quarter compared to EO income of Rs 20 lakh representing divestment provisions no longer required back. PBT after EO rose 13% to Rs 104.37 crore.
Tax expense was down 14% to Rs 27.38 crore as the company has chosen to exercise the option of lower tax rate of 25.17%. Net profit rose 28% to Rs 76.99 crore.
Performance for nine months ended December 2019
For nine months ended December 2019, net sales fell 6% to Rs 2080.54 crore compared to corresponding previous year period. However company operating margins rose 320 bps to 14% leading a 22% increase in operating profit to Rs 292.23 crore.
Other income fell 19% to Rs 21.81 crore. Interest cost was Rs 8.42 crore compared to Rs 3.69 crore. Depreciation rose 28% to Rs 59.84 crore. PBT before EO as a result rose 14% to Rs 245.78 crore. The company had EO income of Rs 3.49 crore during the quarter compared to EO income of Rs 65 lakh in the corresponding previous year period both representing divestment provisions no longer required and accordingly written back. PBT after EO was up 17% to Rs 249.27 crore. Tax expense was down 13% to Rs 65.89 crore. Net profit rose 30% to Rs 183.38 crore.
Commenting on the performance, Rajiv Rajgopal, Managing Director, Akzo Nobel India said, "Overall in the quarter, the industry saw muted growth because of sluggish demand and slowdown in automobile and real estate sectors. We continued to focus on profitability improvement on the back of improved mix and cost management." "We're proud that AkzoNobel's coating technology has been applied on high-speed trains in India providing sheen, protection against corrosion as well as anti-scratch properties," added Rajiv Rajgopal.
The third phase of the solar installation project in our Thane plant has been commissioned recently. Renewable energy usage is also steadily growing in all sites, which illustrates our commitment to reducing our environmental footprint.
The scrip is trading at Rs 2070 at BSE
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