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Akzo Nobel India Ltd

| Quarterly Financial Results Q3 FY 2025-26

BULLISH SENTIMENT

Report Source

⬤2nd Feb 26

Summary : Akzo Nobel India, now under JSW Paints, reports strong operational performance and strategic growth plans despite divestment impacts, with new leadership and a proposed name change.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Standalone Q3 FY25-26 total expenses: ₹7,935 million.
  2. Standalone 9M FY25-26 total expenses: ₹24,200 million.
  3. Consolidated Q3 FY25-26 total expenses: ₹7,928 million.
  4. Consolidated 9M FY25-26 total expenses: ₹24,192 million.
  5. Exceptional items (standalone): INR 279 million (Q3) and INR 18,463 million (9M).
  6. Exceptional items (consolidated): INR 283 million (Q3) and INR 18,459 million (9M).
  7. Standalone Q3 FY25-26 revenue from operations: ₹9,077 million.
  8. Standalone 9M FY25-26 revenue from operations: ₹27,377 million.
  9. Consolidated Q3 FY25-26 revenue from operations: ₹9,077 million.
  10. Consolidated 9M FY25-26 revenue from operations: ₹27,377 million.
  11. Comparable Q3 FY25-26 revenue (excl. divested business): ₹907.7 crore, decline 1.0%.
  12. Comparable 9M FY25-26 revenue (excl. divested business): ₹2,737.7 crore, decline 2.2%.
  13. Reported Q3 FY25-26 revenue (incl. divested business): ₹907.7 crore, decline 13.6%.
  14. Reported 9M FY25-26 revenue (incl. divested business): ₹2,737.7 crore, decline 10.8%.
  15. JSW Paints Limited acquired 61.2% equity, becoming the new promoter.
  16. Both standalone and consolidated unaudited financial results are presented.
  17. Consolidated results include Akzo Nobel India Limited and ICI India Research and Technology Centre Private Limited (subsidiary).

Corporate Overview

  1. India, with a strong pan-India distribution network.
  2. Comparability issues due to the slump sale of Powder Coatings and International Research Center business divisions.
  3. Financial impact from new Labour Codes on employee benefits obligations.
  4. Potential risks from price fluctuations, currency fluctuations, raw material and personnel costs, and market disruptions.
  5. Raw material and personnel costs, price fluctuations, currency fluctuations.
  6. Manufacturing paints, coatings, and allied products in India.
  7. Positive and forward-looking, emphasizing accelerated growth, strengthening competitive position, and value creation.
  8. Committed to increasing investment in innovation, technology, and digital tools for growth.
  9. Millions of customers and families, painters, architects, global brands, and Indian corporates.
  10. Primarily 'Paints' segment, including decorative paints, automotive & vehicle refinish, marine, protective and industrial coatings.
  11. Five state-of-the-art manufacturing facilities and one RD&I center.
  12. Increase investment in innovation, technology, and digital tools.

Risk Factors

  1. Business divestment impacts comparability of results.
  2. New Labour Codes increase employee benefits.
  3. Raw material, currency fluctuations pose risks.
  4. Legal, regulatory, market disruptions are concerns.

Key Drivers

  1. JSW Paints acquired majority stake.
  2. New board composition, new Chairman.
  3. Investing in innovation, technology, digital tools.
  4. Strong volume growth in decorative paints.

Auditor’s Report

  1. Limited review, not an audit opinion, providing moderate assurance.
  2. No material misstatement found in the financial statements.

Board Commentary

  1. Mr. Parth Jindal appointed Non-Executive Director and Chairman.
  2. Mr. Rajiv Rajgopal re-designated Joint Managing Director and CEO.
  3. Mr. Shantanu Maharaj Khosla appointed Independent Director.
  4. Financial impact of new Labour Codes on employee benefits.
  5. Impact of new Labour Codes on employee benefits obligations, recognized as an Exceptional Item.
  6. Proposed change of Company name to 'JSW Dulux Limited', subject to approvals.

Corporate Governance

  1. Appointment of Mr. Shantanu Maharaj Khosla as an Independent Director.
  2. Audit Committee reviewed and approved the financial results.

Management Discussion & Analysis

Future Strategy

  1. Integrate into new ways of working with JSW Paints and be #BetterEveryday.
  2. Increase investment in innovation, technology, and digital tools to accelerate growth.
  3. Accelerate growth and strengthen competitive position, committed to sustainable value creation.

Industry Overview

  1. Focus on innovation to drive accelerated growth in decorative paints.
  2. Rising demand for enhanced aesthetics and architect-led specifications in home exteriors.

Macroeconomic Outlook

  1. Dynamic regulatory environment in India with new Labour Codes impacting operations.

Operational Focus Areas

  1. Innovation, technology, and digital tools investment.
  2. Targeted pricing actions and enhanced engagement with painters and architects.

Performance Drivers

  1. Overall volume growth of 5.9%, with 6.6% excluding exports and 8% in domestic decorative paints.
  2. Revenue growth of 1.8% driven by premium portfolio in paints and coatings.
  3. Focused initiatives including targeted pricing actions and strengthened engagement with painters and architects.
  4. New relations built with marquee global brands and leading Indian corporates.

Risk Control Measures

  1. Monitoring finalization of Central and State Rules and Government clarifications regarding Labour Codes.

Critical Risks

  1. Price fluctuations, currency fluctuations, and developments in raw material and personnel costs.
  2. Impact of new Labour Codes on employee benefits obligations.
  3. Physical and environmental risks, legal issues, legislative/regulatory measures, and market disruptions.
Akzo Nobel India Ltd (AKZOINDIA) Quarterly Report Analysis & Insights | Dhanarthi