Kansai Nerolac Paints (500165) Q4 13/14 earnings summary

Executive summary

• FY14 revenue rose 10.8% YoY to ₹37,390 million; PBT before exceptional items was ₹3,070 million vs ₹3,053 million in FY13.

• Strategic investment continued in capacity, technology, R&D and customer engagement amid weak consumer demand and higher imported input costs.

Financial highlights

• Net sales/income from operations reached ₹37,390.18 million vs ₹33,756.49 million; other income fell to ₹103.31 million from ₹163.17 million.

• PBDIT excluding other income was ₹3,621 million, up 7.7% YoY; depreciation rose to ₹649.76 million following Hosur plant capitalization.

• PBT before exceptional items was ₹3,069.91 million vs ₹3,052.92 million; PAT was ₹2,065.71 million vs ₹2,921.82 million, including a prior-year exceptional credit.

• Dividend recommended at ₹11 per share, or 110%, unchanged from FY13.

Outlook and guidance

• Long-term Indian paint-industry growth was expected at ~1.5–2.0x GDP; per-capita consumption was projected to rise from 2.57 kg to 4 kg by 2016.

• Next-year priorities include sustaining business-excellence initiatives and building organizational analytical capability.

• Infrastructure spending, auto-market expansion and favorable demographics were identified as demand opportunities.