Kansai Nerolac Paints Limited , one of India's leading paint manufacturers, has announced its financial results for the second quarter, revealing a mixed performance amidst challenging market conditions. The company has also outlined its growth strategy focusing on expansion in key areas.

Key Financial Highlights

The company reported a marginal increase in net revenue, which grew by 0.4% year-over-year to ₹1,871.02 crore. However, EBITDA and PBT saw declines of 1.5% and 4.0% respectively, indicating pressure on profitability.

Segment Performance

Kansai Nerolac experienced varied performance across its business segments:

• Automotive Segment: Sustained growth momentum, expected to continue.
• Performance Coating: Witnessed good growth, with positive outlook based on strong order flows.
• Decorative Segment: Overall demand affected by heavy and extended monsoons.

Growth Strategy

Kansai Nerolac has outlined its growth strategy focusing on:

1. Expansion in decorative paints, waterproofing, and construction chemicals.
2. Plans to add over 2,500 new dealers.
3. Launch of new premium products to support expansion.
4. In the industrial segment, upgrading to waterborne technology to maintain leadership position.
5. Anticipating demand recovery from the automotive and infrastructure sectors.

Market Challenges and Opportunities

The company faced several challenges during the quarter:

• Extended monsoons impacting overall demand in the decorative segment.
• Volatility in forex markets.
• Geopolitical uncertainties.

However, Kansai Nerolac also highlighted positive factors:

• Benign raw material prices.
• Expected benefits from GST rate cuts for auto majors and other OEMs.
• Potential boost from infrastructure push.

Future Outlook

Pravin Chaudhari, Managing Director of Kansai Nerolac Paints Ltd, commented on the results: "Looking forward, we expect the momentum in both Automotive and Performance coatings to remain strong and a gradual recovery in Decorative." However, he cautioned that a shorter Diwali season and continued monsoons could impact growth in the short term.

The company continues to perform well in niche areas such as construction chemicals, waterproofing, wood finishes, and projects, indicating diversification efforts to mitigate market challenges.

Industry Perspective

The domestic paint industry may see potential growth. Factors such as infrastructure development, growth in core sectors, and positive trends in automobile and real estate industries are expected to drive long-term demand for paints.

As Kansai Nerolac navigates through these market dynamics, its strategic focus on diverse product offerings, expansion plans, and key growth segments may help in maintaining and strengthening its position as a leading player in the Indian paint industry.

Kansai Nerolac Paints Limited , one of India's leading paint manufacturers, has released its financial results for the second quarter, revealing a mixed performance amidst challenging market conditions.

Revenue and Profit

For the quarter ended September 30, Kansai Nerolac reported a net revenue of ₹1,871.02 crore, representing a modest growth of 0.4% compared to the same quarter in the previous year. However, the company experienced a slight decline in profitability, with profit before tax (PBT) decreasing by 4.0% to ₹184.39 crore.

Segment Performance

The company witnessed varied performance across its business segments:

• Automotive Segment: Sustained growth momentum.
• Performance Coating: Showed good growth, with positive outlook due to strong order flows.
• Decorative Segment: Overall demand was affected by heavy and extended monsoons.

Half-Year Performance

For the first half of the fiscal year, Kansai Nerolac's results were as follows:

Market Conditions and Outlook

Pravin Chaudhari, Managing Director of Kansai Nerolac Paints Ltd, commented on the results, highlighting several factors influencing the company's performance:

• Automotive and Performance Coatings segments may benefit from reduced GST rates for auto majors and OEMs, as well as the infrastructure push.
• The decorative segment faced challenges due to extended monsoons.
• Raw material prices remained benign, but forex markets experienced volatility.
• Geopolitical uncertainties continue to impact the business environment.

Looking ahead, the company anticipates momentum in both Automotive and Performance Coatings segments, with a gradual recovery expected in the Decorative segment.

Industry Outlook

The domestic paint industry in India is estimated to be worth around ₹77,500 crore as of March. The sector is poised for growth, driven by developments in infrastructure, core sectors, automobile industry, and real estate.

Kansai Nerolac Paints continues to maintain a strong presence in the Indian market with nine strategically located manufacturing units and a robust dealer network across the country. The company's diverse product range spans from decorative paints for homes and offices to industrial coatings, positioning it to capitalize on the expected industry growth.