homeearnings NewsIndigo Paints sees softening in raw material costs; expects margin improvement in Q4
Indigo Paints sees softening in raw material costs; expects margin improvement in Q4
In an interview with CNBC-TV18, Hemant Jalan, CMD, Indigo Paints, discussed the Q3 performance and outlook. Jalan said that the company is seeing some softening in raw material costs and going ahead, he expects margin to improve in Q4.
Indigo Paints came out with its Q3 earnings. The company reported a 29.9 percent year-on-year (YoY) increase in net profit at Rs 24.3 crore for the third quarter ended December 31, 2021. In the corresponding quarter last year, the company had posted a net profit of Rs 18.7 crore. Its total revenue during the quarter rose by 26.6 percent YoY to Rs 265.4 crore from Rs 209.6 crore in the year-ago quarter.
In an interview with CNBC-TV18, Hemant Jalan, CMD, Indigo Paints, discussed the Q3 performance and outlook.
Speaking about margin, he shared that it has contracted across the industry. However, he mentioned that margin has improved on a quarter-on-quarter (QoQ) basis for the company and going ahead, he expects it to further improve in Q4 as there has been some softening in raw material costs as well.
"Margin contraction has happened across the paint industry, because of a huge pressure on raw material pricing. But if you look at the margins from the preceding quarter, we have shown a healthy rise and much more rise is expected in the next quarter," he said.
He added, "We have seen a slight softening of some of the raw materials during the last few months."
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Affirming that the company is not facing any stress for its products from the rural side, he explained that Q4 has in fact, always been the strongest quarter for the company seasonally.
"I don't see any stress in the rural market as far as paints are concerned. We have not noticed any slowdown or any significant difference in the demand uptick between the rural areas and the urban areas," he mentioned.
He further said, "Demand is fairly decent across all categories of cities and towns. For our company, Q4 has traditionally been the strongest quarter, both in terms of sales growth as well as in terms of EBITDA margins."
On price hikes, he mentioned, "I am not anticipating any further price hikes in the foreseeable future."
On volume growth, Jalan said that emulsion category has seen a surge of 16 percent.
"We have to look at volume growth in various sub categories of the paint industry to make any meaningful conclusion out of them. But the most important category, which is the emulsion category, we have had a good growth in volume in this quarter in excess of 16 percent," he said.
Watch the video for the full interview.
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First Published: Feb 14, 2022 11:26 AM IST
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