Kansai Nerolac Paints Ltd on Monday reported 28.5% increase in net profit at Rs.84.4 crore for the three months to December on lower input cost. The company reported a net profit of Rs.65.66 crore in third quarter of fiscal 2015. Gross sales during December quarter stood at Rs.1,177.3 crore, up 11.3% from the year-ago period. The bottom line was impacted due to the rupee fall and higher prices of the inputs, primarily of the crude on the derivatives market, coupled with higher tax outgo which rose to Rs.38.9 crore from Rs.27.1 crore, the company said.
Commenting on the numbers, managing director H.M. Bharuka said the company saw high double digit volume and value growth in the decorative segment, but industrial demand was subdued and in single digit, due to the sluggishness in automotive demand, especially in two-wheelers. While the quarter saw a softening in crude oil prices, it is not significantly reflected in derivatives. Volatility in the exchange rate and depreciation of the rupee compounded this problem further, he said. Going forward, the larger global sentiment and slowdown in China along with currency volatility is likely to impact consumer sentiment in the short to medium term. While there is visibility of double digit growth in the decorative segment, situation with respect to industrial in the near future remains a challenge, he said. The size of domestic paint industry stood at Rs.35,500 crore as of March 2015. Kansai Nerolac has five manufacturing units.