'Automobile sales growth would sustain going ahead': Kansai Nerolac MD

As the paint company completes 100 years of operations, Bharuka highlights that it would continue to maintain its leadership position in the industrial paints segment going ahead

At a time when the overall demand in the economy is likely to see an uptick in the festive season, H. M. Bharuka, vice chairman and managing director (MD) of Kansai Nerolac Paints, in an interview with Shreepad S Aute of Business Standard says the demand recovery for the paints industry is better than other sectors. As the company completes its 100 years of operations, Bharuka highlights that it would continue to maintain its leadership position in the industrial paints segment going ahead. Edited excerpts:

Q. We have already entered the festive season, which is expected to improve the overall demand scenario. Would it be relatively better for paint players like you?

A. The overall recovery in the entire economy is faster than expected. People have accepted that Covid-19 is going to be there like normal flu. You can see, barring a few segment, all other people are working, all shops are now opened. So, to that extent recovery is better than the what people had thought. Definitely for the paint industry, it is better than what we had also thought and better than other sectors/industries. We are back to our normal growth level which again, I would say is a pleasant surprise for us. Fear psychosis amongst consumers amid Covid-19 has also now lowered compared to a few months back.

Q. Have you started witnessing demand for luxury paints as easing of lockdown in happening in metros/tier-1 cities?

A. Demand from the urban, mainly from metros, is still low, while demand from the rural market is on a higher side. So, rural demand is compensating for the lower urban demand. It’s not that people are shifting from premium to economy products, but the urban demand has not come back that is why demand for premium products is lower. I believe demand revival in metros would still take time despite festive season due to some factors like painters not being able to travel as railways are still not fully operational. We have also recently launched India’s first anti-viral paint and expect to get good demand for it.

Q. Are there any signs of demand pressure in rural areas as Covid-19 cases are rising?

A. Rural markets had expected Covid-19 to spread and they are not too worried according to me, although there is a fear. I think rural market has accepted this as a new normal. It is not affecting because most of the people are immune to it. And if you look at the mortality rate is not very high. They are recovering faster than I would say urban people. So, I don’t see any demand worries in rural areas due to the pandemic.

Q. Automobile numbers in the recent past months have been very strong. According to you, how sustainable are they as some are saying that retail automobile demand is yet to pick up?

A. Automobile has obviously revived when I look at two-wheeler, four-wheeler and tractor industry. What is yet to recover is the commercial vehicle and the three-wheeler segment to some extent. My take from dealer check is that demand for two-wheeler and passenger vehicle is actually good despite liquidity problems. The pandemic has actually accelerated the demand as people are expected to prefer private/own vehicle rather travelling via public transport for the purpose of safety. This should push two-wheeler and the small car sales and the pick up in rural demand is helping tractor segment. So, to this extent, I believe the automobile sales growth would sustain going ahead.

Q. The company is celebrating completion of 100 years of operations.  Would it continue to remain industrial paint major or would the focus be more on decorative segment?

A. It doesn’t make any difference to us whether it is industrial paint or decorative paint. However, we will continue our leadership position in the industrial paints category and would certainly like to increase our market share in the decorative segment.