Shalimar Paints

Impacted by high operating costs and low demand, the company posted a not-so-good set of numbers for Q3FY14. Lower demand was reflected in the lower net sales at Rs.127 crore, down 1.5% (YoY). Operating costs rose 4%, led by 10% jump in raw material cost and a 43% jump in employee costs. Expenses ate away 97% of the total income in current Q3 compared to 92% in Q3FY13. Finance costs too have risen 25%. Thus all these together pulled down the net profit at Rs.1.5 crore v/s Rs.5 crore in Q3FY13 and Rs.4 crore in Q2FY14. Taxation was down 77% and that to some extent helped shore up the bottomlines.

This small cap company, 112 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 face value is Rs. 2/ share. The company has three plants in Kolkata, Delhi and Nasik, with 54 branches and depots. As such, seasonally, it is the second half which does well for paint companies, Q3 has been bad so let’s hope it does better in Q4. The promoters, Jindals and the Jhunjhunwala Group jointly own 62.36% stake.