Kansai Nerolac jumps after Q1 results

Kansai Nerolac Paints surged 6.03% to Rs 429.25 at 14:21 IST on the BSE after consolidated net profit rose 5.34% to Rs 146.02 crore on 9.38% increase in net sales to Rs 1542.41 crore in Q1 June 2019 over Q1 June 2018.

The result was announced during market hours today, 29 July 2019.

Meanwhile, the S&P BSE Sensex was down by 169.24 points or 0.45% to 37,713.33.

On the BSE, 32000 shares were traded in the counter so far compared with average daily volumes of 4123 shares in the past two weeks. The stock had hit a high of Rs 436 and a low of Rs 397.7 so far during the day. The stock hit a 52-week high of Rs 540.45 on 13 August 2018 and a 52-week low of Rs 343.4 on 23 October 2018.

The size of domestic paint industry is estimated at Rs 50,000 crore as of March 2019. The good growth in infrastructure, core sector as well as automobile and real estate is likely to have a positive effect on the overall demand of paint for the industry, the company said.

Commenting on the results, H. M. Bharuka, vice chairman and managing director, Kansai Nerolac Paints said, "Decorative segment has seen good double-digit volume and value growth. This has helped offset the huge effect of the unprecedented slow-down in the automotive segment where the company has a significant exposure. The company has taken steps to enhance its product portfolio by entering niche markets such as adhesives, construction chemicals, coil coatings, premium wood coatings and functional powder coatings through acquisitions and internal initiatives. The effect of these efforts will be visible in the coming quarters. Our subsidiaries in Nepal and Bangladesh also have done well. During the quarter, costs of inputs were stable and in line with the previous quarter trend. This along with tight control on costs has helped improve the bottom-line. Continued exchange rate and crude oil volatility have kept raw material price levels high. In the industrial segment the company still seeks to get price increase to compensate for the overall inflation. The company expects demand in Decorative segment to remain buoyant but expects challenges of demand to continue in Industrial for the near future."

Kansai Nerolac is the second largest paint company in India and is the leader in industrial segment. The company manufactures a diversified range of products ranging from decorative paints to sophisticated industrial coatings for most of the industries. The company markets its products under the brand names Nerolac, Glossolite, Goody, Allscapes and Excel.

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