Painting A Brighter Picture

Updated: Nov 9 2003, 05:30am hrs
Investor interest in the stocks of paint companies has witnessed a steady rise. The boom in housing and the pick up in industrial and auto segments has boosted the prospects of these companies and that is reflected on the stock prices of these companies.

While the stock of Goodlass Nerolac has witnessed the highest rise of 127 per cent to Rs 363, the share price of Berger Paints has appreciated by almost 89 per cent over the past six months to Rs 132.5 as on November 6, 2003. This is much better than the 42 per cent growth witnessed by the stock of Asian Paints over the same period to Rs 309.

Talking specifically of Berger Paints, a 75-year old paint manufacturer, has posted a 12.4 per cent growth in net sales to Rs 181.3 crore for the quarter ended September 2003. In comparison, Asian Paints, the decorative paint major and Indias largest paint company, posted a growth of 16 per cent in net sales to Rs 494 crore. Raw material costs have been rising for the paint industry over the quarter and this is reflected in the results of all paint companies including that of Berger Paints.

The companys raw material expenses (net of stock) rose 9 per cent to Rs 124.5 crore. At the same time, employee cost grew 17 per cent to Rs 10 crore.

However, a substantial fall in interest outgo i.e by 43 per cent salvaged the companys profit before tax that grew 61.5 per cent to Rs 20.7 crore.

And even though provision for taxation rose 80 per cent, profit after tax by rose 54 per cent to Rs 14.14 crore.

Berger Paints is into the industrial coatings segment as well as decorative paints. In the latter segment, it has popular brands like Weathercoat Smooth, Luxol Silk, Rangoli and Bison. The company also offers many customer-centric services like Colourbank, which facilitates instant customised shade mixing at over 1,300 retail outlets across the country.

Decor Service Colour Consultancy helps people to paint their homes attractively, while through Prolinks it reaches out to architects, designers and builders for personalised requirements. Protectons service is a specialised painting resource against loss prevention. In the industrial coatings segment, it has comprehensive presence in general industrial paints, heavy-duty specialist industrial coatings, automotive coatings and powder coatings.

Housing is a priority in India and more office complexes are mushrooming across all major commercial centres. Thus paints industry can bank on this spurt in demand for interior and exterior paints.

The feel-good factor in the economy is likely to get a fillip and give a boost to industrial sector, triggering demand for paint applications there.

Jump in demand for automobiles of all types including two-wheelers, cars and commercial vehicles is also likely to be sustained. At the same time it has tough competition in all segments from Asian Paints.

To cater to the rising demand, the company has a total installed capacity of 52,000 MT in its plants at Howrah, Vallabh Vidyanagar (Gujarat), Goa and Pondicherry. In 2001 the company had acquired an industrial coatings business from ICI India through a joint venture.

The company also has technology sharing arrangements with overseas players like Orica Australia for Protecton range of heavy-duty anti-corrosive industrial coatings, DuPont Performance Coatings (Germany) and Nippon Paints (Japan) for automotive coatings.

To tap the emerging coil coatings market, it has entered into a joint venture with Becker Industrifarg AB (Sweden).

REPORT CARD
Siemens India Q4 net jumps 85%
Siemens India has witnessed an increase of 85 per cent in its net profit at Rs 53.47 crore for the fourth quarter (Q4) ended September 30, 2003, as compared to Rs 28.83 crore during the same period last year.

Net sales (excluding excise duty) has increased to Rs 436.86 crore as against Rs 376.7 crore.

For the year ended September 30, 2003, the company posted a growth of 61 per cent in net profit to Rs 139.4 crore, while the net sales increased by 10 per cent to Rs 1424.5 crore.

i-Flex H1 net up 3.5%

i-Flex Solutions Ltd has registered a 3.55 per cent increase in its net profit at Rs 92.36 crore for the half year ended September 30, 2003 as compared to Rs 89.19 crore for the same period last year. Total income has increased to Rs 331.15 crore from Rs 269.14 crore.

Following the results, Rajesh Hukku, chairman and managing director of i-Flex Solutions said: “We are pleased with the strong all round momentum in our three lines of business and this is a direct result of our continued investments in product R&D, delivery capability, sales & marketing and branding”.

BOC India H1 net rockets 1000%

BOC India, the gas business major, has witnessed a 10-fold growth in its net profit at Rs 4.26 crore for the half year ended September 30, 2003. Its profit before tax and extra-ordinary items almost trebled to Rs 7.12 crore from Rs 2.18 crore. There was a 10 per cent increase in its sales at Rs 149.5 crore.

Fertilizers & Chemicals Travancore net loss at Rs 200 cr
Fertilizers & Chemicals Travancore Ltd has posted a net loss of Rs 199.93 crore in the year ended on March 31, 2003 as compared to a net profit of Rs 0.57 crore for the year ended on March 31, 2002. Total income has decreased to Rs 1,143.16 crore from Rs 1,389.13 crore in FY-02.

Dabur India H1 net rises 28%
Net profit of Dabur India Ltd has increased by 27.86 per cent at Rs 53.46 crore for the half year ended September 30, 2003 as compared to Rs 41.81 crore for the same period last year. Total income has increased to Rs 641.33 crore from Rs 588.91 crore. Following the results, the company has declared an interim dividend of Rs 0.60 per share for the financial year 2003-04.

DCW H1 net at Rs 10 cr
DCW has registered a net profit of Rs 9.81 crore for the half year ended September 30, 2003. Turnover of the company has increased by around 72 per cent at Rs 319.05 crore from Rs 299.25 crore.