Akzo Nobel India Q3 concall highlights -
Oct business was slow. Business picked up in Nov, Dec. Projects business doing really well due uptick in real estate business
Urban mkts grew faster than rural.Rural grew because of distribution gains.
No price hikes taken in paints
Very strong growth in coatings business vis a vis paints business
Sales at 986 cr, up 8 pc yoy
GMs at 39 pc, up 60 bps
PAT up 16 pc at 98 cr
Aim is to hit 1000cr revenues/qtr. May take 1-2 Qtrs to reach there
New Product pipeline is strong for next 2-3 yrs
Increased A&P spends. Advertised during IPL, T-20 WC, also focussing on Digital channels
On entry of Grasim and JSW group’s entry into paints - management is aware about potential disruption. It ll all depend on the size of their pockets and how deep they want to take the battle
Will also depend on whether they want to make it a price or brand war. Initially, its likely to be a price war
Not keen to put up additional capacities right now. They are working on a 2 shift basis from many factories. Can take it upto 3 shifts. ROE is paramount for them
Not planning backward integration as the Parent company’s size and scale assures them of no major supply side crunches/disruptions
Currently paints are more profitable than coatings. Coatings profitability is slowly improving
Full impact of RM price moderation is yet to come. May help margins going fwd if there are no adverse events in foreseeable future
Disc : invested, biased
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