Kansai Nerolac Paints (500165) Q4 19/20 earnings summary

Executive summary

• FY 2019-20 standalone net sales and operating income fell 4.5% YoY to ₹4,943.17 crore, while PAT rose 14.5% to ₹535.4 crore.

• Cost controls, formulation management and product-mix changes lifted operating profit to ₹781.62 crore and EBITDA margin to 15.8% from 14.3%.

• COVID-19 and lockdowns cloud FY 2020-21 demand; the Board recommended a dividend of ₹3.15 per share, up from ₹2.60.

Financial highlights

• Standalone net sales and other operating income: ₹4,943.17 crore vs ₹5,173.62 crore; reported YoY decline 4.5%.

• Standalone PBDIT/EBITDA: ₹781.62 crore, up 5.3%; PBT ₹683.60 crore, down 4.2%; PAT ₹535.40 crore vs ₹467.35 crore.

• Standalone revenue from operations was ₹4,943.17 crore; discounts and rebates were ₹544.26 crore vs ₹508.66 crore.

• Consolidated revenue from operations was ₹5,279.97 crore vs ₹5,424.32 crore; consolidated PAT ₹515.78 crore vs ₹447.66 crore.

• Standalone operating cash flow increased to ₹620.6 crore from ₹110.4 crore; free cash flow improved to ₹403.6 crore from negative ₹413.1 crore.

Outlook and guidance

• FY 2020-21 began amid lockdowns and severe uncertainty; demand trends across industries were difficult to predict.

• COVID-19 and lockdowns were expected to weigh on demand for some time; priorities included efficiencies and building a sustainable growth environment over the long term.

• Paint-industry growth was expected to be subdued in FY 2019-20 and negatively affected in FY 2020-21 by lockdown measures.