Asian Paints Profits Up 27% As Sales Touch Rs 405 Cr

Asian Paints profits rose 27.1 per cent to Rs 32.06 crore in the first six months of 1997-98 and the company has decided to reward shareholders with an interim dividend of 3.5 per cent.

Net sales jumped 15.62 per cent to Rs 405.09 crore from Rs 350.36 crore. The company has declared a dividend of Rs 3.5 per share.

Operating margins have however dipped reflecting the pressures of competition. From 15.26 per cent last year, margins have dropped to 14.6 per cent this year.

The companys total income grew from Rs 353.71 crore to Rs 408.34 crore during the period under consideration. The industry growth during the same period was 12-14 per cent in the decorative segment while the industrial segment fell by five per cent.

 

Correspondingly, total expenditure was up by 16.46 per cent from Rs 296.89 crore to Rs 345.76 crore.

In a press release, Ashwin Choksi, chairman, Asian Paints said ``this growth would not have been possible without the commitment and dedication of ourr people. It is teamwork that has built the company into an industry leader and I have no doubt that this spirit will see us scaling new heights.

Interest outgo was lower in the first half at Rs 10.25 crore compared to Rs 12.71 crore in the previous year. The company has made a provision of Rs 7.25 crore for depreciation and Rs 13.02 crore for tax.

Asian Paints has over 40 per cent market share with more than 14,000 direct dealers. During the second half of 1997-98, the company intends to launch the dealer tinting system and Apex Exterior paints.

Currently, the company is augmenting the installed capacity at Patancheru plant. It has already increased paint manufacturing capacity to 50,000 tonnes.

The companys 50:50 joint venture ``Asian PPG Industries Ltd with PPG Inc. USA has commenced production. Overseas, the company is in the process of setting up two new joint ventures, in Mauritius and the Sultanate of Oman.