Kansai Nerolac Paints , one of India's leading paint manufacturers, reported a modest growth in its Q1 financial results, navigating through various challenges in the market. The company's standalone revenue grew by 1.80%, while consolidated revenue increased by 1.40% compared to the same quarter last year.

Financial Performance

The company's financial performance showed mixed results:

Segment Performance

Decorative Segment

• Volume growth remained flat
• Paint+ product range now contributes over 12% of sales with 28 products in the market
• Added 400 new Nerolac NXTGEN shops
• Expanded dealer network to over 30,000 direct dealers

Industrial Segment

• Showed higher single-digit growth
• Automotive business reported market-leading growth despite sluggish demand
• Protective coatings segment reported higher than market growth

Challenges and Impacts

• Early onset of monsoon affected May sales
• Geopolitical tensions impacted sales in the North region
• Continued losses from Bangladesh operations
• Antidumping duty on Chinese titanium dioxide expected to cause 1% to 1.30% inflation in the decorative segment

Strategic Initiatives

• Capitalized Jainpur water-based facility, adding 44,000 KL capacity
• Focusing on strong markets and going deeper with resources
• Expanding into new areas in the auto segment to increase addressable market
• Launched new products in both decorative and industrial segments

Management Commentary

Pravin Chaudhari, Managing Director of Kansai Nerolac, noted, "Dealers are returning to Nerolac from competitors, citing better ROI compared to new competition. We expect quarter 2 to perform better due to earlier Diwali timing and improved construction activity."

Outlook

The company remains cautiously optimistic about the future, expecting improved performance in Q2 due to the festive season and enhanced construction activity. However, challenges such as geopolitical tensions and raw material price volatility continue to pose risks to the business.

Kansai Nerolac continues to focus on innovation, network expansion, and strategic market positioning to navigate through the competitive landscape and drive growth in the coming quarters.

Sri Lankan Expansion

Kansai Nerolac Paints , one of India's leading paint manufacturers, has announced a significant expansion move into the Sri Lankan market while reporting its first-quarter financial results. The company's Board of Directors has approved an investment of LKR 300 million (approximately Rs 9.00 crore) in Kansai Paints Lanka (Private) Limited, its Sri Lankan subsidiary. This strategic move represents Kansai Nerolac's commitment to expanding its footprint in the South Asian market and capitalizing on growth opportunities in Sri Lanka.

Q1 Financial Performance

For the quarter ended June 30, Kansai Nerolac Paints reported:

• Net revenue of Rs 2,087.42 crore, a modest growth of 1.8% compared to the same quarter last year
• EBITDA of Rs 311.97 crore, down 6.7% year-on-year
• Profit Before Tax (PBT) of Rs 310.08 crore, a 4.1% decrease from the previous year

Market Dynamics and Performance

Pravin Chaudhari, Managing Director of Kansai Nerolac Paints, commented on the quarter's performance: "During the quarter, demand for Decorative showed signs of revival, though an early monsoon impacted during the later part of the quarter. KNP decorative performance was affected due to the disturbance in April which impacted key markets in the North."

He added, "In Automotive, demand for KNP continued to be better than the market, on the back of various initiatives. Performance coatings registered strong growth. Raw material prices were benign. Forex remained volatile."

Outlook

Looking ahead, the company anticipates an improvement in decorative demand, driven by a favorable monsoon and the early onset of Diwali. In the industrial segment, Kansai Nerolac expects its market-leading growth trajectory to continue.

The size of the domestic paint industry in India is estimated at around Rs 77,500 crore as of March 2025. The company believes that good growth in infrastructure, core sector, automobile, and real estate is likely to have a positive effect on the overall demand for paint in the long run.

As Kansai Nerolac Paints enters its 105th year, it continues to be at the forefront of paint manufacturing, with nine strategically located manufacturing units across India and a strong dealer network. The company's expansion into Sri Lanka underscores its commitment to growth and market leadership in the region.