Q1 Results: Decorative Paints Business Lifts Kansai Nerolac’s Profit Amid Auto Sector Slowdown
Kansai Nerolac Paints Ltd.’s profit for the June quarter grew due to margin expansion and double-digit volume growth in its decorative paints business, even as the auto sector slowdown continued to weigh on its earnings.
Kansai Nerolac is highly exposed to the auto segment, HM Bharuka, vice chairman and managing director at the paintmaker, told BloombergQuint in a conversation. “We will never be able to compensate the entire loss of that (auto) segment.”
The double-digit volume and value growth in the decorative business, however, helped the paintmaker to offset the slowdown in the automotive segment, Bharuka said, adding that he expects the decorative business to continue its current growth through 2019-20 and beyond, despite a slowdown in the real estate space.
The company said it would continue its expansion by acquiring companies within and outside India to tap the niche markets such as adhesives, construction chemicals, coil coatings, among others.
Kansai Nerolac Q1 Results: Key Highlights (YoY)
- Revenue rose 9 percent to Rs 1,542 crore.
- Net profit up 5 percent at Rs 146 crore.
- Ebitda jumps 14 percent to Rs 254 crore.
- Margin expands 70 basis points to 16.5 percent.
Watch the full interview here: