Kansai Nerolac Paints Q1 results: Net profit at Rs 231 cr; stock jumps 2%; what management says

Kansai Nerolac Paints Ltd on Monday reported a 68.72 per cent year-on-year (YoY) fall in consolidated net profit at Rs 230.83 crore compared with Rs 738 crore in the same quarter last year. The year-ago quarter had an exception item worth Rs 661.25 crore. The consolidated revenue from operations declined 1.1 per cent YoY to Rs 2,133.06 crore from Rs 2,156.80 crore in the corresponding quarter last year. 

Following the development, the paints stock rose 2.05 per cent to Rs 281.10 on BSE.

Managing Director Anuj Jain said the quarter continued to witness good demand for Automotive Coatings. The demand for Decorative was muted due to unprecedent heat wave, labour shortages and elections. Demand for Performance Coating was subdued but it picked up in June, Kansai Nerolac Paints said.

"A combination of measures like cost control, product mix and procurement efficiencies helped improve gross margins over the corresponding quarter last year. Raw material prices have now gradually started to harden due to various geopolitical issues. The company is actively taking steps to mitigate this cost increase. The company is also undertaking various initiatives in the digital space to improve its efficiency in the marketplace," Jain said.

A favorable monsoon demand should improve for decorative, Jain said as he bets on new project and order pipeline to lift demand for performance coatings.

The size of domestic paint industry is estimated at around Rs 75,000 crore, as of March 2024. 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, Kansai Nerolac Paints said.