Asian Paints has projected a volume growth of between 13 and 14 per cent in its paints business for 1998-99.
Addressing shareholders at the annual general meeting yesterday in Mumbai, Ashwin Choksi, chairman and managing director said growth in first quarter of this year was between 17 and 18 per cent.
The paints major which went through a traumatic phase in the same period last year due to a management change projected that growth and profitability will be on target.
Ashwin Dani, vice-chairman informed shareholders that the joint venture with PPG Industries is expected to gross a turnover of Rs 100 crore. In its annual general report the company had said "the joint venture has been able to procure substantial business from the automobile companies newly entering business in India. The growth prospects for the joint venture, in our opinion, are good."
The paints major posted an increase of 5.8 per cent in net profits in the first quarter of 1998-99 to Rs 14.05 crore from Rs 13.28 crore, last year. Sales rose by 13.6 per cent to Rs 206.56 crore from Rs 181.82 crore.
The company was hauled up by shareholders for building inventories and increase in working capital requirements. "Working capital will not increase in relation to volume of business," Choksi assured shareholders.
The company plant at Bhandup in Mumbai is expected to become operational again by December. The plant was gutted by a fire in February 1996.
Responding to shareholder demands for a 1:1 bonus at the company's annual general meeting, Ashwin Choksi, chairman and managing director Asian Paints said that the company will consider a bonus "at the right time".
Choksi said that a total of 8.39 per cent of the total shareholding of the company had been dematerialised by institutional investors and individual investors. The total volume of dematerialised shares is 33,63,000 shares.
Choksi also assured shareholders that the paints major has not been directly affected by sanctions imposed by the US in the wake of the nuclear tests as "we do not borrow overseas nor do we import any sensitive products from the US."
Shareholders observed that ad-spend of the company had increased to Rs 20 crore from Rs 17 crore and strongly hinted that it ought to be reduced if it was not going to result in an increase in sales.
