Kansai Nerolac Paints (500165) Q4 12/13 earnings summary

Executive summary

• FY13 sales and operating revenue reached ₹33,756.49m, up 11.8% YoY; profit before exceptional items and tax was broadly flat at ₹3,052.92m.�

• Reported PAT rose to ₹2,921.82m, including a ₹1,149.25m write-back of prior-year excess depreciation; PAT excluding the exceptional item was ₹2,144.90m.�

Financial highlights

• Net sales/income from operations, net of excise and discounts, was ₹28,566.19m vs ₹26,005.72m; other income fell to ₹163.17m from ₹242.66m.�

• PBDIT was ₹3,524.15m vs ₹3,615.67m; depreciation was ₹471.07m vs ₹563.53m under the revised method.�

• Tax expense was ₹1,280.35m vs ₹892.43m; reported PAT was ₹2,921.82m vs ₹2,158.85m.�

• Proposed dividend was ₹11 per equity share, or 110%, unchanged from FY12.�

Outlook and guidance

• Paint-industry growth is expected at 12–13% over the long term, estimated at roughly 1.5–2x GDP growth.�

• Phase 2 operations at the Hosur manufacturing unit were expected to commence in Q1 FY14; capacity expansion and customer reach remained strategic priorities.�

• Housing-sector demand could improve following a central-bank interest-rate reduction in the final quarter, though the outlook remained conditional.�