Q4 show hit by dull auto sales, no near-term relief seen for Kansai Nerolac

Analysts slash earnings estimates for FY20 and FY21; dismal demand in key segment may limit firm's pricing power

Poor demand faced by the automotive sector hampered industrial paint major Kansai Nerolac in its March 2019 quarter (Q4).

The company earns 45 per cent of its revenues from the industrial segment and consequently, in Q4, the mentioned segment saw 5 per cent decline in volumes. 

As a result, net revenues rose just 4 per cent — lowest since September 2015.

Moreover, with demand for automobiles remaining muted — volumes fell 7-19 per cent across categories in April 2019 — the management, too, projected a very subdued outlook, particularly for its industrial segment — for at least the next two quarters.

Weak guidance called