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Kansai Nerolac Paints falls 9% on weak Q2 results

The stock slipped 9% to Rs 378, also its 52-week low, after the company posted 15.6% YoY declined in net profit at Rs 1.22 billion in September quarter, due to higher operational costs.

SI Reporter  |  Mumbai 

Kansai Nerolac sells its Chennai land to SPV floated by Brigade & GIC Singapore

Shares of 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 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, 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 were down 2% to 3% on the BSE. In comparison, the S&P BSE Sensex was up 0.22% at 34,391 points.

First Published: Mon, October 22 2018. 14:49 IST