Stocks of major paint firms fall as Q2 numbers point to earnings pressure

Prices of key raw materials were elevated in Q2 on the back of high crude oil prices and a weak rupee against the dollar

Stocks of major paint companies - Asian Paints, Berger Paints and Kansai Nerolac (Nerolac) - fell 4.8-7.3 per cent on Tuesday, following weak September quarter (Q2) earnings of Asian Paints and Nerolac that were announced on Monday. The two companies posted 14-16 per cent year-on-year (YoY) drop in net profit, while Berger is expected to report Q2 numbers on similar lines on November 1.

Apart from the broader market correction, expectations of pressure on profitability - in light of rising crude oil prices and a weakening rupee - were already high in the Street. The same is reflecting in the stocks,