Kansai Nerolac Paints Ltd on Tuesday reported a 38.7 percent decline in its consolidated net profit to Rs 125.32 crore for the third quarter ending December 2021, on account of inflationary pressures on raw material inputs.
The company had posted a net profit of Rs 204.50 crore in the corresponding quarter last year, Kansai Nerolac said in a BSE application.
However, its revenue from operations in October-December 2021 jumped by 13.67 percent to Rs 1,810.35, compared to Rs 1,592.55 crore in the period of the year ago.
Kansai Nerolac’s total spending stood at Rs 1,648.39 crore, a jump of 23.65 per cent against Rs 1,333.06 crore a year ago.
Kansai Nerolac Paints Vice President and Managing Director HM Bharuka said: “The quarter witnessed a good demand for decorative. In car, demand was muted on account of the semiconductor chips shortages.”
He added that on commodity costs, the quarter continued to witness inflationary pressures along with volatility in crude and exchange rates. “Tightness of supply chain remained in the quarter. The company has not been able to encash the full advantage of demand.”
The company affected price increases in decorative, and cumulative price increase to date is more than 20 percent. Similarly, an average price increase of about 18 percent has been implemented in all industrial segments, Bharuka added.
“Effect of these increases will be reflected forward. Material costs will continue to increase, necessitating a further price increase to compensate for this cost increase. The fair management of costs and overheads remained,” he said.
Bharuka said that in anticipation, it is expected that the impact of Omicron on demand will be limited.
On the prospect of the Indian paint industry, Bharuka said: “The size of the domestic paint industry is estimated at around Rs 55,000 crore as of March 2021. The good growth in infrastructure, core sector, such as automobiles and real estate, is likely have a positive effect on the overall demand for paint for the industry in the long run. “
Shares of Kansai Nerolac Paints Ltd on Tuesday hit Rs 559.55 each on the BSE, down 1.46 percent from the previous close.
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