Kansai Nerolac Paints reported 77.1% decline in consolidated net profit to Rs 33.47 crore on 58.6% fall in total revenue from operations to Rs 638.92 crore in Q1 FY21 over Q1 FY20.
Profit before tax in Q1 June 2020 stood at Rs 41.55 crore, down by 81.4% from Rs 222.82 crore in Q1 June 2019. The company's total expense contracted by 54.3% to Rs 605.53 crore and current tax expense shrunk 80.2% to Rs 14.39 crore during the period under review. EBIDTA de-grew by 67.7% to Rs 80.5 crore in Q1 FY21 over Q1 FY20.
Commenting on the results, H. M. Bharuka, vice chairman and managing director, Kansai Nerolac Paints said, There was an unprecedented demand destruction this quarter due to the lock down imposed on account of COVID -19. Both sales and bottom-line was impacted as a result. Sales in April were a complete washout across.
Sales of Decorative has seen revival in May and June with the company registering double digit volume growth in both the months. Industrial sales continued to be impacted in both May and June due to the slow recovery of the end customers.
Despite the severe drop in topline, an aggressive cost control program and judicious management of overheads helped the company report profit. EBITDA drop was also contained to just 350 basis points. Basic raw material prices were benign this quarter though there was volatility in forex rates.
Looking forward, the company is optimistic that demand recovery would continue. Due to frequent lockdowns and COVID cases across, managing the eco system of supply chain is becoming a bigger challenge. However, with multiple plants the company is in a better position to manage it though it is creating a logistic challenge.
In its outlook, the company said that the size of domestic paint industry is estimated at Rs 52000 crore as of March 2020. The good growth in infrastructure, core sector as well as automobile and real estate is likely to have a positive effect on the overall demand of paint for the industry in the long run.
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Kansai Nerolac Paints is a paint company which offers a range of products, including decorative, automotive coatings and performance coatings.
Shares of the paint maker rose 2.36% to currently trade at Rs 443 on BSE. The stock traded in the range of 428.60 and 447.20 so far during the day
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