India's Kansai Nerolac Paints posted a near 31% fall in second-quarter profit on Wednesday, hurt by muted demand due to heavy monsoons and as expenses were higher.
The company, majority owned by Japan's Kansai Paint Co, said its consolidated net profit fell to Rs 123 crore ($14.6 million) in the three months ended Sept. 30 from Rs 177 crore a year earlier.
Kansai Nerolac's revenue from operations fell 0.3% to Rs 1,951 crore during the quarter.
Moreover, its total expenses rose 3.3% to Rs 1,795 crore, weighing on profit margins.
KEY CONTEXT
Sluggish demand in Kansai Nerolac's decorative segment was due to heavy and extended monsoons and it expects demand to improve in the second half, the company said in an exchange filing.
Paint companies have raised prices by 2%-2.5% during the quarter after heavy discounting in the previous quarters, analysts at Anand Rathi have said.
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But their expenses were impacted by volatile crude oil prices, while costs of raw materials like additives increased, analysts have said.
Moreover, Grasim Industries' entry in the paints business earlier this year has kept competition intensive in the sector.
Rival Berger Paints India missed quarterly estimates on Tuesday, also hurt by higher rainfall and as price hikes dampened demand.
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