Paint maker Akzo Nobel India posts smaller third-quarter profit

JSW Dulux

07/02/2025 09:29

Feb 7 (Reuters) - Paint maker Akzo Nobel India  AKZO.NS  reported a lower third-quarter profit on Friday as rising
costs pressured margins.
    The 'Dulux' paint maker reported a 5% fall in consolidated net profit to 1.09 billion rupees ($12.47 million) in the
October-December quarter. 
    The firm, a unit of Netherlands' Akzo Nobel  AKZO.AS , said its revenue from operations increased 2% to 10.51 billion
rupees, but this was slower than the 3% rise in revenue for the previous quarter.
    Its cost of raw materials consumed rose 11%, pushing its total expenses 2.3% higher to 9.10 billion rupees.
    This led to a 2% contraction in margins on earnings before interest and tax (EBIT) compared to an expansion of 3% in
the second quarter.
    For further earnings highlights, click  urn:newsml:reuters.com:*:nFWN3OY0K2 
    
KEY CONTEXT 
    Printmakers saw weak demand from retail consumers who are choosing cheaper brands in the face of high inflation,
according to analysts.
    Demand forecasts by paint companies have been mixed so far.
    While market leader Asian Paints  ASPN.NS  missed earnings estimates and issued a grim demand outlook, Kansai Nerolac
 KANE.NS  posted a marginal rise in profit due to higher automotive demand. It expects the government's plan to boost
domestic consumption to revive demand. 
    Grasim Industries  GRAS.NS  and Berger Paints  BRGR.NS  will report their results next week.   
    
  
    
PEER COMPARISON 
                                  Valuation (next 12     Estimates (next 12      Analysts' sentiment              
                                  months)                months)                                                  
                      RIC         PE     EV/EBITDA       Revenue     Profit      Mean     No. of   Stock to       Div
                                                         growth (%)  growth (%)  rating*  analyst  price          yield
                                                                                          s        target**       (%)
 Akzo Nobel India      AKZO.NS    34.66  22.34           8.50        9.69        Buy      2        0.86           3.07
 Asian Paints          ASPN.NS    47.02  31.96           5.60        3.03        Hold     34       0.92           1.43
 Kansai Nerolac        KANE.NS    27.74  17.50           7.54        11.84       Hold     12       0.84           0.98
 Paints                                                                                                           
 Berger Paints India   BRGR.NS    43.02  27.22           9.54        9.20        Hold     20       0.93           0.74
 
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above
the PT
    
OCTOBER-DECEMBER STOCK PERFORMANCE 
    
    
-- All data from LSEG 

-- $1 = 87.4010 Indian rupees
    

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AKZO INDIA Q3    https://tmsnrt.rs/4hLB6zg
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 (Reporting by Hritam Mukherjee and Ashna Britto in Bengaluru)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))