Kansai Nerolac Rockets 19% on Stellar Q1 Show: Key Factors Boosting Growth

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Kansai Nerolac Rockets 19% on Stellar Q1 Show: Key Factors Boosting Growth

By Malvika Gurung

Investing.com -- Shares of the paint company Kansai Nerolac Paints (NS: KANE ) skyrocketed 18.76% to Rs 512.5 apiece on Tuesday, following stellar June earnings results, as its profits jumped despite a sharp rise in input costs and inflationary pressures.

The paint maker’s net profit surged 37% YoY to Rs 162.9 crore and net revenue jumped over 47% to Rs 1,944.6 crore in the June quarter. Its EBITDA rose 34.7% YoY to Rs 255.6 crore amid healthy demand for Decorative and Industrial Paints segments during the quarter.

The company’s management stated that an increase in demand in the auto sector due to a gradual easing of chip shortages led to a demand revival in Kansai Nerolac’s Industrial Paints business.

Further, a cut in crude oil prices, currently remaining under the $100/barrel mark, supported the company’s growth, as oil is a major raw material for the paint industry.

Read Also: Here’s How Rising Crude Oil Affects Paint Industry

Similar to its peers, Asian Paints (NS: ASPN ) and Berger Paints (NS: BRGR ), Kansai Nerolac has implemented a price hike in the decorative and industrial segments in the quarter amid a sharp depreciation in the rupee.

It is in continued discussions with OEM customers for a further price hike, informed the company.

“ There has been a revival in demand in Industrial led by increased demand in Automotive due to the gradual easing of the chip shortages,” it added.

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