Shalimar Paints

Shalimar Paints posted a not-so-good Q1FY14 performance. The company posted a 42% (YoY) drop in its net profit at Rs.2 crore on a 11% drop in total revenue at Rs.109 crore. This small cap company, 109 years old, per se, is really no great shakes financially when compared with its peers. Typical of a company of this size, the numbers are miniscule. Its equity base is very small at Rs.3.79 crore and it recently split its equity share of Rs. 10/- into 5 equity shares of Rs. 2/- each.  The company has three plants in Kolkata, Delhi and Nasik, with 54 branches and depots.

The only buzz around the stock was on rumours of stake sale as promoters have been running the company in a very lackadaisical way which is evident from the numbers. Other paint companies like Kansai Nerolac and also Sherwin-Williams of USA had also evinced interest. But the company soon issued a clarification stating that it was not looking at selling stake. Since then, the stock performance has been lackluster. As such, seasonally, it is the second half which does well for paint companies and Q2 is especially weak given the monsoon season. The promoters, Jindals and the Jhunjhunwala Group jointly own 62.36% stake.