Mumbai: Paint manufacturer Kansai Nerolac has reported disappointing quarterly earnings, with heavy and prolonged monsoon rains dampening demand across its key segments. According to Business Standard, the company’s net profit fell short of analyst expectations.
Reuters reported that Kansai Nerolac Paints, majority-owned by Japan’s Kansai Paint Co, saw its consolidated net profit drop 31% to Rs 123 crore in the quarter ended September 30, down from Rs 177 crore a year earlier. Revenue from operations also slipped 0.3% to Rs 1,951 crore during the quarter.
Managing Director Pravin Chaudhari explained the challenges.
Sluggish demand in our decorative segment was primarily due to heavy and extended monsoons. We expect demand to improve in the second half,”
Chaudhari said in an exchange filing.
The problem started early. Business Today noted that while April and May showed decent demand, an early monsoon onset in late May disrupted sales patterns. Construction activities stalled, and painting work got postponed across many regions.
A PL Capital report highlighted that adverse weather conditions hit hard in states like Jammu & Kashmir, Himachal Pradesh, Punjab, Rajasthan, and Gujarat. Heavy rains caused delays in protective and waterproofing projects. The industrial paint side faced subdued demand with flat auto/OEM volumes.
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According to Devdiscourse, the company’s total expenses rose 3.3% to Rs 1,795 crore, putting additional pressure on profit margins. The monsoon effect combined with higher costs created a perfect storm for the paint maker.
However, there were some bright spots. The automotive coatings segment performed better than the overall market, driven by various company initiatives. Kansai Nerolac is also banking on GST rate cuts for autos to spark a strong rebound from the third quarter onwards.
Business Standard estimates the domestic paint industry size at around Rs 77,500 crore as of March 2025. The company remains optimistic about long-term prospects, citing good growth in infrastructure, automobiles, and real estate sectors.
TradingView reported similar challenges faced by the company in previous quarters, with extended monsoons becoming a recurring problem for the paint industry. The pattern seems familiar – early or extended rains disrupting the traditional peak season for exterior painting work.
Kansai Nerolac shares closed at Rs 243.60 on BSE on Monday. Other major paint companies like Asian Paints, Berger Paints, and Akzo Nobel India also faced similar weather-related headwinds during the quarter.
The company’s leadership is hoping that normalizing weather conditions, coupled with pent-up demand for exterior and waterproofing products, will bring recovery in the coming months. Meanwhile, they’re focusing on cost control measures and digital initiatives to improve marketplace efficiency.
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