Aug 4 (Reuters) - Akzo Nobel India reported a lower first-quarter profit on Monday, hurt by weak retail demand for its paints, including the premium 'Dulux' brand.
Consolidated net profit fell more than 20% year-on-year to 910 million rupees ($10.39 million) for the April to June quarter, while revenue slid 4% from last year.
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KEY CONTEXT
Akzo Nobel India was acquired by steel-to-autos conglomerate JSW Group for about $1.6 billion in June, shifting investor focus to the company's turnaround strategy after years of trailing larger rivals such as Asian Paints, Kansai Nerolac and Berger Paints.
The deal came amid rising competitive pressure in India's paints industry and subdued demand, as urban consumers delayed non-essential spending or opted for low-cost alternatives.
Last week, market leader Asian Paints said that retail weakness was showing early signs of abating. Smaller peers weathered the slowdown relatively well, thanks to their exposure across sectors and industries, analysts noted.
Kansai Nerolac and Berger are scheduled to report their earnings later this week.
PEER COMPARISON
|
Valuation (next 12 months) |
Estimates (next 12 months) |
Analysts' sentiment |
|||||||
|
RIC |
PE |
EV/EBITDA |
Revenue growth (%) |
Profit growth (%) |
Mean rating* |
# of analysts |
Stock to price target** |
Div yield (%) |
|
|
Akzo Nobel India |
(AKZO.NS) |
33.75 |
21.98 |
7.75 |
10.84 |
Buy |
2 |
0.99 |
2.75 |
|
Asian Paints |
(ASPN.NS) |
52.30 |
34.60 |
5.43 |
7.45 |
Hold |
34 |
1.02 |
1.02 |
|
Kansai Nerolac Paints |
(KANE.NS) |
27.00 |
16.59 |
7.17 |
27.04 |
Hold |
13 |
0.88 |
1.00 |
|
Berger Paints India |
(BRGR.NS) |
49.32 |
30.86 |
8.79 |
10.24 |
Hold |
20 |
1.05 |
0.67 |
* 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
APRIL-JUNE STOCK PERFORMANCE
-- All data from LSEG
-- $1 = 87.5690 Indian rupees
Reporting by Hritam Mukherjee in Bengaluru; Editing by Sumana Nandy
Source: Reuters