India's Kansai Nerolac posts subdued earnings, expects budget to boost demand for paints

Kansai Nerolac Paints

05/02/2025 14:01

Feb 5 (Reuters) - India's Kansai Nerolac Paints
 KANE.NS  posted subdued quarterly earnings on Wednesday but
said demand should improve on the back of the federal budget's
consumption-boosting proposals. 
    Indian paintmakers have been grappling with increased
competition in the sector following Grasim Industries'  GRAS.NS 
entry early last year. 
    Moreover, shoppers have been cutting back on discretionary
spending as they choose cheaper private labels, which have
pushed companies to dole out discounts to woo them back.
    Kansai Nerolac's outlook differs from that of its bigger
rival Asian Paints  ASPN.NS , which forecasts weak short-term
demand on continued weak consumption in urban areas.
    "Demand in decorative (business) was impacted due... to
lower spend on discretionary products," Kansai Nerolac Managing
Director Anuj Jain said. 
    The company's third-quarter consolidated revenue was at
19.22 billion rupees ($220 million) in the three months ending
Dec. 31, little changed from a year earlier and narrowly missing
analysts' average estimate, according to data compiled by LSEG. 
    Its profit before exceptional items and tax rose 2.8% to
2.14 billion rupees, as automotive demand helped cushion the
impact of soft consumer spending.
    The company flagged a "better than market" automotive
growth, which helped it offset weakness in the decorative paints
business. 
    Kansai Nerolac also made a one-time gain of 6.3 billion
rupees during the quarter, mainly proceeds from a land parcel
sale. 
    MD Jain will step down from his role and will be replaced by
Pravin Chaudhari from April 1, the company said. 
    Chaudhari is currently an executive officer at the company's
Japanese parent Kansai Paint Co  4613.T  and has had a 5-year
stint at 'Fevicol'-parent Pidilite Industries  PIDI.NS . 

($1 = 87.3770 Indian rupees)

 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Mrigank
Dhaniwala)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter:
@MukherjeeHritam;))