In This Article:
Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Akzo Nobel India Ltd (BOM:500710) reported a strong performance with an income of 1,056 crores, marking a 2% growth despite challenging market conditions.
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The coatings business experienced high single-digit growth in value and mid-single-digit growth in volume, indicating a positive trend.
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The company saw strong performances in the marine, protective, and powder coatings segments, contributing to overall growth.
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Akzo Nobel India Ltd (BOM:500710) has successfully maintained a robust B2B business, particularly in the marine and protective coatings sectors.
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The company is expanding its distribution network and product offerings, including the launch of new products like Dulux Promise Freedom, to capture a larger market share.
Negative Points
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The paints business experienced low single-digit growth in value, indicating challenges in this segment.
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Profit levels were down by 5%, partly due to a special dividend issued in the previous year, affecting income from fixed funds.
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The automotive and vehicle refinish segments faced challenges, impacting overall business performance.
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There were challenges in the coil coating part of the industrial coatings business due to economic issues in export markets.
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The company is undergoing restructuring, which may create uncertainty among employees and distributors, potentially affecting morale.
Q & A Highlights
Q: How does the recent budget's consumption boost impact the industry? A: The consumption boost is a welcome move, particularly addressing MSMEs and middle-class tax relief. The effects will be seen starting April, with a potential uptick in consumption sectors by the second half of the year. This could lead to a sharp rise in the paints and coatings business, aligning with expected GDP growth. Unidentified_4
Q: Can you explain the decrease in employee benefit expenses this quarter? A: The decrease is due to the review of employee provisions and actuarial evaluations conducted in the December quarter, which resulted in cost reductions. The underlying employment costs remain intact. Unidentified_6
Q: What is the thought process behind the restructuring of the industrial coatings and R&D business? A: The restructuring is in initial stages, driven by the parent company's request to carve out the powder coatings and R&D business for higher value addition. The International Research Center in Bangalore plays a key role in color development for automotive and specialty coatings. Unidentified_4