Mumbai: Asian Paints has planned capital expenditure (capex) of Rs3 billion in 2009-10, a top official said on Tuesday.
“A major part of the capex would go in setting up its sixth plant at Rohtak in northern Haryana state,” P.M. Murty, managing director and CEO, said in an analyst meet after results.
“The capital would also be utilised for acquiring land for its seventh plant in western Maharashtra state and for warehouses,” he said.
“Asian Paints is likely to firm up a land deal for the plant in next few weeks,” Murty said.
He said that the company sees buoyant growth to come from tier I and tier II cities in FY10 and expects decoratives segment to push topline growth adding: “Growth would be a challenge in industrial automotive segments.”
Murty also said that the company plans to increase capacity in Egypt but did not give details.
Earlier in the day, the paint maker posted a 9% increase in Jan-March profits on improved demand in the decorative paints business, beating forecasts.
Net profit for the quarter rose to Rs925.4 million from Rs848.4 million a year ago.
A Reuters poll of brokerages estimated profits at Rs773.25 million.
“Demand conditions for decorative business improved in the fourth quarter,” Murty said.
“The industrial coatings business, including the automotive paints business, was impacted by the general demand slowdown,” he said.
“The company’s international operations performed well on the back of good growth in Middle East and South Asia region,” he added.
Shares in the company side-stepped a 4.07% rally in the Mumbai market to end down 1.71% at Rs898.4.