Delayed monsoon and sluggish festive demand are likely to affect the margins of leading paint-maker Nerolac Kansai even in the third quarter of fiscal 2013.

The Mumbai-based company’s profits declined by 20 per cent in the second quarter of the fiscal due to rise in input costs and an overall slowdown in the economy, which hit the automotive, infrastructure and real estate sectors.

Hopeful of pick-up

However, the company is optimistic of demand picking up this year.

“We expect a good volume growth of 14-15 per cent in this quarter but profits will be under pressure. Crude and raw-material prices have begun to stabilise but that will not help our margins in this quarter. Also, we were affected by the fluctuating rupee in the last few quarters,” said H.M. Bharuka, Managing Director, Nerolac Kansai.

Nerolac clocked sales of Rs 3,500 crore last fiscal and expects a 15 per cent growth in this financial year.

No hike in prices

The company has no plans to hike prices in the near future after a 20 per cent price increase in June-July.

On the outlook for this year, Bharuka said the paint industry would see single-digit growth of 7-8 per cent this year as against double-digit growth last year.

Estimated at Rs 35,000 crore, decorative paints will boost the overall paint sector.

Bharuka was speaking to Business Line on the sidelines of an initiative launched by Nerolac called ‘Paint the Change’.

The marketing initiative will encourage consumers to donate unused or left-over paint towards structures across the country that are in need of beautification and renovation.

“It is our endeavour to create a platform to empower consumers to make the change around them, thus helping them invest in a greener future,” he said.

The company has called for participation on social-networking sites and is targeting 90 cities across the country.

priyanka.pani@thehindu.co.in

Related Topics
comment COMMENT NOW