When most companies around the world are going through cost-cutting and having to let go of employees, Asian Paints is raising the salaries of its employees to boost staff morale.
Its scope of assistance to the sales channel includes hospitalization and insurance, full sanitization facilities for partner stores, and direct cash support. Asian Paints also transferred Rs40 crore into the accounts of its contractors.
The company has donated Rs35 crores to the Central and State Covid 19 Relief funds. The company is also making sanitizers to aid the nation’s fight against the virus.
"We have to set an example of true leadership and an organization that takes care of all its stakeholders. I have been updating the board regularly on all such initiatives and have received their approval for these actions,” MD and CEO Amit Syngle told The Economic Times.
“I see this as a big opportunity to step in and interact with every single employee and assuage their concerns in an uncertain marketplace. We are not in the hire and fire business and as a mature brand I have reassured employees that we all are together in this."
The company also started making hand and surface sanitizers under the brand name Viroprotek after the Ministry of Chemicals urged them to do it.
Expanding its product range into sanitizers would allow Asian Paints to increase their earnings.
Asian Paints is keeping a watch on cash flows, deferring expenses where it can.
Syngle said: “We have been debt-free for years and are quite comfortably placed even if the uncertainty goes on for the next four or five months. The company had announced a huge dividend payout in March and shareholder return is our top priority.”
Asian Paints has a good return on equity (ROE) track record with three years ROE of 25.49%. It has been maintaining a healthy dividend payout of over 46%.
However, the company has delivered a low sales growth of 9.62% compound annual growth rate (CAGR) and profits growth of 12% CAGR over the past five years which is likely to increase amid this Covid-19 situation.