Asian Paints share price gained marginally in early trade on Friday a day India’s leading paint manufacturer announced its September quarter earnings and a Rs 2,650 crore backward integration plans. The stock opened flat at Rs 3,146 apiece on the NSE and Rs 3,146 on BSE. The counter had dropped more than 3 per cent on Thursday post Q2FY23 announcement.
The Mumbai headquartered reported 32.83 per cent rise in consolidated net profit at Rs 803.83 crore for the second quarter, missing the Street expectations. It had reported a net profit of Rs 605.17 crore in the same quarter last fiscal year. Sales in the international market increased 15.3 per cent in Q2FY23 to Rs 805.99 crore from Rs 699.28 crore in the year-ago period, according to the company said.
Asian Paints also announced an interim dividend of Rs 4.40 per equity share. The company informed that the dividend will be paid to the shareholders on or after Thursday, November 10.
Following Asian Paint’s second quarter business update, brokerages have revised targets.
Asian Paints plans Rs 2,650 crore backward integration.
Meanwhile, Asian Paints, in a major backward integration move, will invest about Rs 2,650 crore to manufacture Vinyl Acetate Ethylene Emulsion (VAE) and Vinyl Acetate Monomer (VAM) in India and white cement in the UAE.
While the VAE and VAM investment will be made within India the manufacturing of the white cement will be under a 60:40 joint venture in Fujairah, United Arab Emirates (UAE), with Riddhi Siddhi Crusher & Land Transport (Riddhi Siddhi), Fujairah, UAE, Associated Soap Stone Distributing Company Private Limited (ASD), India and others.
The outlay for the VAE and the VAM project will be about Rs 2,100 crore and for the white cement, it will be about Rs 50 crore. The investment will be made over a period of three years, including the land cost for VAE and VAM and over two years for white cement.
Asian Paints stock has delivered a return of around 5 per cent to investors in 2022 so far. The 52-week range of the stock is Rs 3,590-Rs 2,560.
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