Asian Paints Net Rises 21.9% To Rs 67.49 Crore

Asian Paints' gross turnover crossed Rs 1,000 crore for 1997-98 as the company shook off the turmoil caused by last year's change in management and posted a 21.9 per cent rise in net profit. Dividend was maintained at Rs 7.5 per share.

Net sales rose 8.6 per cent to Rs 800.34 crore, while other income jumped to Rs 19.12 crore from Rs 7.55 crore. Gross sales increased 8.7 per cent to Rs 1,019 crore against Rs 937.76 crore last year.

Other income includes around Rs 6 crore received as insurance claims after the fire at the company's Bhandup plant last year. It also includes treasury income and processing charges following the transfer of the automotive business to Asian-PPG, the joint venture with PPG Industries of the United States. Operating margins improved marginally to 17.5 per cent from 16.33 per cent.

 

Interest costs fell 9.7 per cent to Rs 19.58 crore, while depreciation rose 40.2 per cent to Rs 16.98 crore. Net profit touched Rs 67.49 crore from Rs 55.38 crore the previous year.

Ashwin Dani, Asian Paints vice-chairman said the company plans to increase its overrall paints capacity by 1.19 lakh tonne to 1.65 lakh tonne by March 1999. This will propel the company into the list of world's top 10 paints companies by volume. "The year 1998-99 definitely appears more difficult than last year. But we should be able to post a volume growth of 10-12 per cent in paints," he added.

The performance in 1997-98 was partly affected by lower realisations resulting in lower sales of phthalic anhydride of Rs 62 crore against Rs 75 crore last year. "We have also cut our overheads significantly," Dani added.

Last year, Asian Paints launched 'colour world', its dealer-tinting system and added 1,000 dealers to its 12,000-strong network.

The company is in the process of setting up two subsidiaries in Oman and Mauritius. Land has been acquired in Oman, while clearance is awaited for that for the Marutius project.