JSW Dulux, formerly Akzo Nobel India, sees profit drop in Q1 despite strong underlying growth in retained business, as the company advances plans for a 1:10 stock split aimed at increasing investor participation.
JSW Dulux, the paint maker formerly known as Akzo Nobel India, reported a softer first quarter as profit and sales came under pressure, even as the business that remained with the company after its restructuring posted stronger underlying growth. The company said net profit fell 12.42% year on year to Rs 79.7 crore in the quarter ended June, from Rs 91 crore a year earlier, while revenue from operations slipped 2.8% to Rs 965 crore from Rs 993.1 crore.
Operating performance weakened as EBITDA dropped 14.4% to Rs 115.1 crore from Rs 134.5 crore, pulling the margin down to 11.93% from 13.54%. But on a comparable standalone basis, JSW Dulux said its retained business delivered 25% volume growth, with revenue rising 18.8% to Rs 965 crore and EBITDA up 14.7% to Rs 115.1 crore. Profit after tax for that retained business more than doubled to Rs 135.5 crore.
The company said the figures were presented after the regrouping of certain promotional costs. It also said Rs 55.9 crore of dividend income related to a payout from its subsidiary, ICI India Research and Technology Centre Pvt Ltd, at Rs 447 per share. JSW Dulux said the comparable figures for the retained business exclude the carved-out unit and remain provisional, unaudited and based on management estimates.
In a separate move, the board approved a 1:10 stock split, under which each existing share with a face value of Rs 10 would be divided into 10 shares of Rs 1 each. The proposal still needs shareholder approval through postal ballot as well as regulatory clearances. Parth Jindal, chairman of JSW Dulux, said the aim was to make the stock more accessible to a wider base of investors, adding that the split would not change the company’s intrinsic value but could improve liquidity and broaden participation. Business Standard’s report on the company’s latest quarterly performance also showed that the preceding quarter had been mixed, with revenue and operating profit both lower year on year even as profit improved sequentially.
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