It was double whammy for Goodlass Nerolac's investors on Friday - a near 100% growth in Q4 net profit and a liberal dividend of Rs 9 per share.
As a consequence, the scrip of the decorative and industrial paints maker spurted 6.5% to Rs 171.30 on BSE by the end of the first half of today's session. The scrip rallied as much as 11.1% to Rs 178.70, a 52-week high, earlier. But volumes were thin, at 6,788 shares. The stock is generally thinly traded on BSE, with average daily volumes at 6,205 shares.
Goodlass Nerolac Paints has staged a smart comeback on the bourses in recent years on the back of improving financials. From Rs 73.70 on 17 September 2001, the stock has surged 132.4% to the current Rs 171.30. The rally in the stock has manifested amid intermittent corrections.
For Q4 ended 31 March 2003, GNPL has posted a 95.7% growth in net profit to Rs 8.65 crore. Net sales/income from operations jumped 13.5% to Rs 159.12 crore (Rs 1.59 billion) from Rs 140.15 crore (Rs 1.40 billion).
For FY 2002-03, net profit surged 45.6% to Rs 39.84 crore from Rs 27.36 crore. Net sales increased 11.1% to Rs 653.37 crore (Rs 6.53 billion). But a point to note here is that the recent Q4 and full year's results are not comparable with that of the past as the latest results include figures of two wholly-owned subsidiaries - Saurashtra Paints, Vatva, Ahemdabad and GNP Madras Perungudi, Chennai - which were merged with GNPL with effect from 1 April 2002.
Nevertheless, last fiscal, the company has benefited from increasing sales from both its segments of focus - industrial and decorative. While the recovery in the auto industry has boosted sales in the industrial segment, the boom in housing construction has set off growth in the sales of decorative paints.
Goodlass Nerolac Paints is the second-largest paint manufacturing company in India. The market leader in the industrial paints segment, it is also one of the major producers of decorative paints in the country. GNPL can boast of an association with many strong MNCs like Nihon and E I Dupont. GNPL produces a full range of resins, varnishes, oils, pigments and paints in the industrial, decorative and marine segments.
In the industrial paints segment, the company enjoys a market share of around 45% of the organised sector. It has a strong hold in the automotive paint segment, and major clients include original equipment manufacturers like Maruti Udyog, Bajaj Auto, Telco and Mahindra & Mahindra.
The company has now decided to concentrate on the decorative segment, which forms 70% of the Indian paints market.
GNPL recently decided to shut down its manufacturing unit at Lower Parel, Mumbai, on account of non-viability.
The company is setting up a new manufacturing unit at Bawal, Haryana. It has revised upwards the project cost of this new unit from Rs 70 crore to Rs 90 crore.
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