Kansai Nerolac Paints on Monday reported 71 per cent fall in its profit after tax of Rs 43 crore in Q1 FY21 over the same quarter of the previous year due to crashing demand in the wake of COVID-19 crisis and countrywide lockdown.
Net revenue was down by 59 per cent to Rs 598 crore while earnings before interest, taxes, depreciation and amortisation (EBIDTA) cracked by 68 per cent to Rs 81 crore.
"There was unprecedented demand destruction this quarter due to the lockdown imposed on account of COVID-19. Both sales and bottom-line were impacted as a result," said Vice Chairman and Managing Director H M Bharuka.
"Sales in April were a complete washout across. Sales of decorative have seen a revival in May and June with the company registering double-digit volume growth in both the months. Industrial sales continued to be impacted in both May and June due to the slow recovery of end customers."
Despite the severe drop in topline, said the company an aggressive cost control programme and judicious management of overheads helped the company report profit.
EBITDA drop was also contained to just 350 basis points. Basic raw material prices were benign this quarter though there was volatility in forex rates.
Looking forward, the company said it is optimistic that demand recovery will continue. Due to frequent lockdowns and COVID cases across, managing the ecosystem of the supply chain is becoming a bigger challenge.
The size of domestic paint industry is estimated at Rs 52,000 crore. The good growth in infrastructure, core sector, as well as automobile and real estate, is likely to have a positive effect on the overall demand of paint for the industry in the long run.
Kansai Nerolac Paints has six manufacturing units across the country. It manufactures a diversified range of products ranging from decorative paint coatings for homes, offices, hospitals and hotels to sophisticated industrial coatings for most of the industries.
( With inputs from ANI )