• KNPL reported a drop of revenue by 7.6% YoY in 3QFY20 led by dip in demand of both decorative paints and industrial paints businesses, while the decline in industrial paints was marginally higher over expectations.
• The gross margin expanded by 297bps YoY to 37.5% due to decline in raw material cost. EBITDA increased 8.4% YoY. EBITDA margin expanded 227bps YoY to 15.4% due to gross margin expansion and cost saving initiatives. PAT increased 8.8% YoY due to lower tax rate.
• The benefit of lower input prices continued to reflect on the company's gross margins during the quarter. Going ahead, as expected company should witness gradual improvement in decorative paints business during FY21.
• In view of the underperformance on the sales front, the EPS forecast for FY20 and FY21 by 8% and 14% respectively.
Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.
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