Asian Paints Q4 results: PAT rises 45% to Rs 1,234 crore, declares Rs 21.25 dividend

Asian Paints on Thursday reported a 45 per cent year-on-year (YoY) jump in the consolidated net profit at Rs 1,234.14 crore for the quarter ended on March 31, 2023, against a net profit of Rs 850.42 crore in the same quarter previous year. The paint manufacturer's consolidated revenue from sales rose about 11 per cent YoY to Rs 8,750.85 crore from Rs 7,889.94 crore in the year-ago period.

On a sequential basis (QoQ), Asian Paints' net profit and revenue from operations increased 15 per cent and 2 per cent from Rs 1,072.67 crore and Rs 8,607.50 crore, respectively, in the December 2022 quarter, the company said in the filing with the exchanges.

The company's board has recommended payment of a final dividend of Rs 21.25 per equity share with a face value of Re 1 each for the financial year ended March 2023, which is subject to approval of the shareholders at the ensuing 77th annual general meeting (AGM) of the company.

Asian Paints registered double-digit volume and value growth in Indian decorative business in Q4 and for the full year. It has been consistently registering a double-digit volume growth trend on a 3 year CAGR basis.

Non-auto Industrial Business crossed Rs. 1,000 crores mark in the year, said the company, while double-digit constant currency growth in international business in the fourth quarter and the entire fiscal year. The company said that it is committed to home décor revenue growing to 8-10 per cent of Decorative Business by FY 2025-26.

Sourcing and formulation efficiencies coupled with softening material prices and calibrated price actions resulted in improved PBDIT margin in Q4 as well as for the full year. Sequentially, Q4FY23 standalone and consolidated PBDIT margin increased by 300 bps and 260 bps respectively, compared to Q3FY23, Asian Paints added.

For the year ended on March 31, 2023, Asian Paints reported a 36 per cent jump in the consolidated net profit at Rs 4,106.45 crore, compared to a bottomline of Rs 3,030.57 crore in the fiscal year 2021-22. The company clocked a 19 per cent jump in the consolidated revenue from sales at Rs 34,367.83 crore during the period under review.

"It has been an outstanding year for us with a 14 per cent volume growth and 20 per cent value growth in our standalone business and a net profit growth of 31 per cent. Our growth in both the Industrial coatings have been stellar, growing double digits in volume and value, delivering one of the highest profits in the last 2 decades," said Amit Syngle, Managing
Director & CEO of Asian Paints.

"Going forward, as a market leader, we will continue to aggressively pursue growth. Our performance will be driven by our consistent focus on customer centricity, innovation, sustained investment in B2B business coupled with our powerhouse brand, robust supply chain and distribution network”, he added.

Meanwhile, shares of Asian Paints extended their gains and jumped about 3 per cent to Rs 3,129 on Thursday following a strong Q4 performance.

The company board has fixed Friday, June 9, 2023 as the record date for determining entitlement of shareholders to final dividend for the financial year 2022-23. The dividend, if approved by the shareholders, will be paid on or after Friday, June 30, 2023, the company's statement added.

The total dividend for the financial year ended March 31, 2023, aggregates to Rs 25.65 per equity share of the face value of Re 1
each, with a dividend payout ratio of 60 per cent, including an interim dividend of Rs 4.40 per equity share as approved by the Board of Directors at their meeting held on October 20, 2022. which was paid thereafter.

Asian Paints is India’s leading paint and decor company and ranked among the top 7 coatings companies in the world. Asian Paints along with its subsidiaries have operations in 15 countries across the world with 27 paint manufacturing facilities, servicing consumers in more than 60 countries.

Asian Paints has reported strong numbers vs our estimates on all fronts. Volumes growth of 16 per cent was ahead of estimates. Deflation in commodity basket has come through very favourably during the quarter with GM/EBITDA expansion of 393bps/256bps QoQ. We believe the trend should continue in the near term at a modest pace, said Amnish Aggarwal – Head of Research, Prabhudas Lilladher.

"However, Asian Paints might settle for margins lower than historical given the expected entry of Grasim in Paints. We remain positive about the company. However, a re-rating looks unlikely given premium valuations and likely disruption due to the entry of a large player. We have an 'accumulate' rating on the stock with a target price of Rs 3,150," he added.

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