India's Akzo Nobel Q2 profit rises on lower raw material costs

Berger Paints India

02/11/2023 08:10

BANGALORE, Nov 2 (Reuters) - Akzo Nobel India  AKZO.NS  reported a 44% rise in second-quarter profit on Thursday,
helped by a drop in raw material costs.
    The Indian unit of Dutch paint maker Akzo Nobel NV  AKZO.AS  said its consolidated net profit rose to 942 million rupees
($11.32 million) for the quarter ended Sept. 30 from 654 million rupees last year. 
    Revenue from operations rose 3.2% to 9.56 billion rupees, while the cost of materials consumed fell 11.6%. 
    For further results highlights, click  FWN3C30QF 
    
    KEY CONTEXT
    Easing prices of crude, which account for about 30% of paint makers' raw material costs, has been a boon to the Indian
paint industry. 
    Lower raw material costs had more than made up for the slow revenue growth at Akzo Nobel in the past three quarters as
well.
    "In retail, softening demand and erratic rains muted sales," Akzo Nobel India Managing Director Rajiv Rajgopal said. 
    Lower input costs helped market leader Asian Paints  ASPN.NS  report a 54% rise in net profit in the September quarter
and Kansai Nerolac  KANE.NS  post a 56% increase in profit.
    
    PEER COMPARISON
                                  Valuation (next 12       Estimates (next 12            Analysts' sentiment         
                                       months)                  months)                                              
                       RIC     PE      EV/EBIT  Price/S  Revenue      Profit      Mean      # of      Stock to       Div
                                       DA       ales     growth       growth      rating*   analysts  price          yield
                                                                                                      target**       (%)
 Akzo Nobel India Ltd  AKZO.N   24.36    15.62  NULL        10.36       14.76     Hold             1      0.90           2.69
                       S                                                                                             
 Asian Paints Ltd      ASPN.N   50.75    34.19  NULL        9.17        13.88     Hold            34      0.91           0.88
                       S                                                                                             
 Berger Paints India   BRGR.N   48.62    30.59  NULL        11.36       21.69     Sell            19      1.01           0.48
 Ltd                   S                                                                                             
 Kansai Nerolac        KANE.N   32.94    20.99  NULL        11.04       21.08     Buy             12      0.92           0.57
 Paints Ltd            S                                                                                             
    
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
    
    JULY-SEPT STOCK PERFORMANCE
 
    -- All data from LSEG
    -- $1 = 83.2270 Indian rupees

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 (Reporting by Anuran Sadhu in Bengaluru; editing by Eileen Soreng)
 ((Anuran.Sadhu@thomsonreuters.com; +91 8697274436;))