Kansai Nerolac Tanks 5%, Hits Fresh Low; Net Profit Falls 85% YoY in Q4

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Kansai Nerolac Tanks 5%, Hits Fresh Low; Net Profit Falls 85% YoY in Q4
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of the paint company Kansai Nerolac Paints (NS: KANE ) fell 4.8% to Rs 410.5 apiece at 1pm, after tanking 6.5% to record a fresh 52-week low at Rs 400 apiece on Wednesday.

The stock slumped on disappointing earnings results for the March-ending quarter, as the company’s consolidated net profit declined sharply by 84.5% on a YoY basis to Rs 19.17 crore, led by muted sales and higher input costs in the quarter.

Revenue from operations climbed 5.27% YoY to Rs 1,536.6 crore, while EBITDA fell 60% YoY to Rs 82.9 crore in the quarter under focus. 

The Jan-Mar period witnessed inflationary pressures led by the aggravated Russia-Ukraine crisis, which pushed raw material/input costs higher. 

As a result, the company’s margin sharply contracted by 1,000 basis points to 5.4% in Q4 FY22. Its total expenses also rose 15.5% YoY to Rs 1,503.54 crore in the quarter.

"Overall demand situation is expected to remain healthy, and the company remains positive and well poised to do better. It is expected that price increases taken in FY 21-22 will accrue in the coming year," stated MD Anuj Jain.

In FY22, Kansai Nerolac Paints’

  • Net profit declined 34.7% YoY to Rs 343.15 crore,
  • Revenue from operation surged 25.5% to Rs 6,369.35 crore, and
  • Total dividend fell to Rs 2.25/share from Rs 5.25/share in FY21.

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