Shalimar Paints slumps after reverse turnaround in Q4

Shalimar Paints tumbled 9.08% to Rs 81.60 at 11:54 IST on BSE after the company reported a consolidated net loss of Rs 10.29 crore in Q4 March 2014 as against net profit of Rs 0.37 crore in Q4 March 2013.

The Q4 result was announced after market hours on Friday, 30 May 2014.

Meanwhile, the S&P BSE Sensex was up 299.30 points or 1.24% at 24,516.64.

On BSE, so far 26,000 shares were traded in the counter as against average daily volume of 14,034 shares in the past one quarter.

The stock hit a high of Rs 84.90 and a low of Rs 79.80 so far during the day. The stock hit a 52-week high of Rs 116 on 31 May 2013. The stock hit a 52-week low of Rs 48.95 on 4 September 2013.

The stock had outperformed the market over the past one month till 30 May 2014, advancing 8.26% compared with Sensex's 8.03% rise. The scrip had also outperformed the market in past one quarter, jumping 23.03% as against Sensex's 14.66% rise.

The small-cap company has equity capital of Rs 3.79 crore. Face value per share is Rs 2.

Shalimar Paints' total income from operations declined 8.77% to Rs 128.23 crore in Q4 March 2014 over Q4 March 2013.

Shalimar Paints reported a consolidated net loss of Rs 2.80 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). Total income from operations declined 3.71% to Rs 483.05 crore in FY 2014 over FY 2013.

While overall decorative business growth was flat in FY 2014, the revenue of high margin products grew close to 20% and business with club dealer counters grew by 30%, Shalimar Paints said. Industrial business was impacted by the slowdown in the economy, Shalimar Paints said in a statement.

Talking about the results, Mr. Sameer Nagpal, MD and CEO, Shalimar Paints said, "2014 was a year of transition as the company changed its strategic direction towards consumer business. With the change in strategy, a number of corrections and initiatives were undertaken through the year to ready the company for accelerated growth in the coming years. We now have a defined execution roadmap backed by consumer-focused brand and channel strategy, and a robust team capable of managing this transition".

Mr. Nagpal added, "Based on rigorous internal evaluation and external review, we found it imperative to make certain control changes including tightening of provisioning norms. Our profitability this year has been impacted as a result of these actions. Structurally, we continue to improve our product mix and consolidate our hold on channel".

Established in 1902, Shalimar Paints has been a pioneer in the field of paints and coatings in India. It has three manufacturing units and a strong footprint across the country with 57 branches and depots. The company has an extensive product range in decorative and industrial segments.

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