Kansai Nerolac Paints (GOONERPA) was formerly known as Goodlass Nerolac Paints. The group`s principal activities are to manufacture and market industrial paints and offer a comprehensive product range from pre-treatment chemicals to surface finish coating. The group produces oils, inorganic pigments, organic pigments and synthetic resins. The company`s products include decorative and industrial paints used for walls, wood, metals and industrial coatings. In 1983, Goodlass Nerolac Paints strengthened itself by entering in technical collaboration agreements with Kansai Paint Company, Japan and Nihon Tokushu Toryo Company, Japan. Goodlass Nerolac Paints became a wholly-owned subsidiary of Kansai Paint Company after the latter took over the entire stake of the company in 1999. It has five strategically-located manufacturing units all over India and a strong dealer network of over 11,000 dealers across the country. The company manufactures a diversified range of products ranging from architectural coatings for homes, offices, hospitals and hotels to sophisticated industrial coatings for most of the industries. The company is a market leader in industrial/automotive segment supplying over 90% of the OEM requirements. It entered into a technical collaboration with E.I. Du-Pont de Nemours & Company Inc., USA and Oshima Kogya Company, Japan for different products. Nipa Chemicals is an associate company which specializes in the manufacture of pre-treated chemicals. Nipa Chemicals is a joint venture of Nihon Parkerizing Company, Tokyo, Japan, and Kansai Nerolac Paints.
Result Update: 08 Nov 2011
Kansai Nerolac announced results for the second quarter and half year ended September 2011. Net sales increased 15.5% YoY in 2QFY12. The demand conditions in both the automotive and decorative segment were subdued during the quarter. Thus, the growth was led by better product mix and price increases. Rising interest rates impacted demand conditions in the auto segment, while extended monsoons slowed down the off take in the decorative segment. Operating margins stood at 14.8% in 2QFY12, a decline of 90 bps over 2QFY11. It may be noted that prices of titanium dioxide, a key raw material ingredient, have increased considerably over the recent past impacting the overall margin profile of the company. In addition, rupee depreciation in the current quarter further worsened the situation. Bottom line registered a growth of 6.5% YoY in 2QFY12 and was lower than the 9% YoY growth in operating profits. This was due to fall in other income (down 36.9% YoY) and rise in depreciation expenses (up 11.9% YoY). The stock closed higher today.
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