Asian Paints Q4 Results 2022

India’s largest paint manufacturer Asian Paints posted its results for Q4 FY22 on May 10, 2022. The company’s profit attributable to the owners of the company was down 16.2% QoQ (Quarter on Quarter) to Rs 850 crore from Rs 1,015 crore in the previous quarter. On a YoY (Year on Year) basis, the company’s profit attributable to the owners of the company was largely flat.

This was mostly due to a dip in Asian Paints‘ revenue from sales which came in at Rs 7,889 crore for the quarter under review from Rs 8,462 crore in the previous quarter. On a YoY basis, the revenue from sales was up 20.6% to Rs 7,889 crore from Rs 6,541 crore in the year ago period.

The dip in Asian Paints’ overall results is attributed to lower ‘other operating revenue’, largely because of a delay in the subsidy income of Rs 31 crore. However, the company states that it is confident of receiving the dues from the Government.

The company’s board recommended a final dividend payout of Rs 15.50 per share. With this, the total dividend to be paid by Asian Paints for FY22 aggregates to Rs 19.15 per share. Asian Paints’ scrip closed in the green at Rs 3,086.35, up by 2.70% at the end of the intraday trading session on May 10, 2022.

Highlights

• Revenue from operations up 18.6% YoY to Rs 7,892 crore from Rs 6,651 crore in the year ago period
• Net profit up 0.5% YoY to Rs 874 crore from Rs 1,031 crore in the year ago period
• FY22 Consolidated Sales cross Rs 28,500 crores backed by strong volume growth
• Q4 sales increase by 20.6%, 12 month sales increase by 34.6%
• Improvement in gross margins on a sequential basis, increase by 450 basis points in Q4 compared to Q2
• The domestic Decorative business grew strongly, registering 8% volume growth and 20% plus revenue growth on a high base

Misses

• The company’s profit attributable to the owners of the company was down 16.2% QoQ to Rs 850 crore from Rs 1,015 crore in the previous quarter
• Revenue from operations down 7.4% QoQ to Rs 7,892 crore in the quarter under review from Rs 8,527 crore in the previous quarter
• Other operating revenue down to Rs 2.7 crore in the quarter under review from Rs 65 crore in the previous quarter and Rs 109 crore in the year ago period
• Earnings Per Share (EPS) down to Rs 8.87 from Rs 10.59 in the previous quarter and Rs 8.88 in the year ago period

Segment-wise results

• Paints: Revenue up by 18.4% YoY to Rs 7,663 crore from Rs 6,467 crore in the year ago period
• Home improvement: Revenue up by 25.4% YoY to Rs 232 crore from Rs 185 crore in the year ago period

Other things to know about Asian Paints

• Asian Paints’ P/E ratio is at 91.80 against the industry average of 16.65
• The company’s P/B ratio is at 21.78 against the industry average of 3.00
• Asian Paints’ dividend yield is at 0.59% against the industry average of 2.10%

Other Highlights

• The company mentioned that the economic crisis in Sri Lanka has led to currency devaluation resulting in the recognition of exceptional item of Rs 48.50 crores towards exchange loss arising on foreign currency obligations of Causeway Paints Lanka (Pvt.) Limited in the consolidated financial results. 
• A foreign currency translation loss of Rs 139.87 crores has been recognized in the ‘Other Comprehensive Income’ in consolidated financial results.
• Subsidy income under ‘other operating revenue’ has been lowered by Rs 31.10 crores as the company has re-assessed the expected timing of receipt of cash flow towards subsidy receivable from the State Governments and has accordingly provided for the time value of money.
• An amount of Rs 53.73 crores computed under the ‘expected credit loss’ method has been recognized as an exceptional item towards subsidy receivable for earlier years.

What the Management says

Amit Syngle, Managing Director & CEO, Asian Paints Limited said, “It was yet another quarter of solid and strong double digit value growth across all businesses, despite the prevailing uncertainty around Covid, macro-economic challenges and heightened geo-political tensions. The International Business managed to deliver a double-digit revenue growth for the quarter despite severe challenges in key markets. The Industrial Coatings business closed the quarter with another round of robust double digit revenue growth with continued momentum in the Protective Coatings segment. The scale-up in the Home Décor business continued unhindered, making further inroads through network expansion and introduction of unique value propositions for its customers. We continued to improve our operating margins on a sequential basis which was a result of some calibrated price increases, driving the premium and luxury product growths, coupled with some strong work on driving operational efficiencies across businesses.”

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Research Analyst: Bavadharini KS