 "Kansai Nerolac Paints falls 9% on weak Q2 results")
Shares of Kansai Nerolac Paints have slipped 9% to Rs 378 per share, also their 52-week low on the BSE, after the company posted a 15.6% year on year (YoY) declined in its net profit at Rs 1.22 billion in September quarter (Q2FY19), due to higher operational cost. The company had a profit of Rs 1.45 billion in the same quarter last fiscal.
Net sales of the company, however, grew 10.7% YoY at Rs 12.86 billion during the quarter. EBIDTA (earnings before interest, tax, depreciation, and amortization) was Rs 1.95 billion down by 11.9% over the same quarter of the previous year.
The company said factors like GST rate changes in July leading to destocking by dealers, lingering monsoons over many parts of India and a delayed festival season affected demand for both decorative and industrial customers
“Despite these conditions the company has had good growth. As was being seen in earlier quarters, uncertainty on the currency front and crude oil prices was more pronounced this quarter as well. This resulted in significant increase in input costs which impacted the bottom-line,” H. M. Bharuka, Vice Chairman and Managing Director, Kansai Nerolac Paints said.
The company expects the growth momentum to be good in decorative but subdued for industrial in the near future. It is hoped that the rupee and crude oil will stabilize at the current levels. Any adverse change will put further pressure on margins, added Bharuka.
Besides, Kansai Nerolac Paints, Asian Paints, Akzo Nobel India, Shalimar Paints, and Berger Paints were down 2% to 3% on the BSE. In comparison, the S&P BSE Sensex was up 0.22% at 34,391 points.
Net sales of the company, however, grew 10.7% YoY at Rs 12.86 billion during the quarter. EBIDTA (earnings before interest, tax, depreciation, and amortization) was Rs 1.95 billion down by 11.9% over the same quarter of the previous year.
The company said factors like GST rate changes in July leading to destocking by dealers, lingering monsoons over many parts of India and a delayed festival season affected demand for both decorative and industrial customers
“Despite these conditions the company has had good growth. As was being seen in earlier quarters, uncertainty on the currency front and crude oil prices was more pronounced this quarter as well. This resulted in significant increase in input costs which impacted the bottom-line,” H. M. Bharuka, Vice Chairman and Managing Director, Kansai Nerolac Paints said.
The company expects the growth momentum to be good in decorative but subdued for industrial in the near future. It is hoped that the rupee and crude oil will stabilize at the current levels. Any adverse change will put further pressure on margins, added Bharuka.
Besides, Kansai Nerolac Paints, Asian Paints, Akzo Nobel India, Shalimar Paints, and Berger Paints were down 2% to 3% on the BSE. In comparison, the S&P BSE Sensex was up 0.22% at 34,391 points.
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%