Kansai Nerolac Q2 PAT slides 38% YoY to Rs 98 cr

Kansai Nerolac Paints posted a 38.1% decline in standalone net profit to Rs 98.54 crore in Q2 FY22 from Rs 159.28 crore registered in Q2 FY21.

The paint maker declared net revenue of Rs 1,521 crore, posting a growth of 16.2% over the corresponding quarter of the previous year. Profit before tax declined 40.4% year on year to Rs 130.6 crore in Q2 FY22.

EBIDTA for Q2 FY22 was at Rs 165 crore, posting a de-growth of 37.3% over the same quarter of the previous year. Standalone total expenses were higher by 29% at Rs 1,396.37 crore in Q2 FY22 over Q2 FY21.

Commenting on the results, H. M. Bharuka, vice chairman and MD of Kansai Nerolac Paints said, The quarter witnessed good demand in Decorative. Automotive production was hampered due to the unavailability of semiconductor chips. Inflationary trend has further intensified during the quarter and has reached unprecedented levels. Inflation is more severe in Industrial. Numerous force majeures across the globe have created supply chain issues. Forex markets continued to be volatile. Given the circumstances, the effort of the company has been to strike a balance between topline and bottom-line. Keeping in mind the sentiments in the market, the company has been able to partly pass on the inflationary effect in both Decorative and Industrial. Sustained efforts continue to obtain further price increases to offset the impact of inflation. The company focused on selling a better product mix as well as aggressive cost controls along with judicious management of overheads. Looking forward, factors like good monsoon, buoyancy of the economy on account of containment of COVID due to the vaccination program should keep demand healthy.

Over the outlook on the Indian paint industry, the company said the size of domestic paint industry is estimated at around Rs 55,000 crore as of March 2021, and there is a good growth ahead. 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 in the long run, it said.

In a separate filing, the company approved payment of interim dividend of Rs 1.25 per share with record date of 9 November 2021.

Kansai Nerolac Paints is a paint manufacturing company that offers a wide spectrum of quality paints. The company has six strategically located manufacturing units all over India and a strong dealer network across the country.

The scrip shed 1.29% to end at Rs 544.35 on the BSE on Friday.

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