Near-term margin concerns an overhang on Kansai Nerolac Paints' stock

Higher advertising costs and demand worries could put pressure on profitability

The stock of the third-largest decorative paint maker in the country, Kansai Nerolac Paints, shed 3.25 per cent in trade on Friday, taking its losses over the past three trading sessions to 7.4 per cent.

This decline follows a lower-than-estimated September quarter (Q2FY23) performance, worries that efforts to enhance decorative segment market share may delay margin recovery, and demand slowdown in the current quarter. Brokerages have cut their earnings estimates by up to 12 per cent over the next two years to reflect these concerns.

The September quarter performance missed Street estimates, largely due to the muted showing in the