India's Kansai Nerolac posts surprise quarterly profit fall as costs bite
May 6 (Reuters) - India's Kansai Nerolac Paints (KANE.NS), opens new tab reported an unexpected decline in fourth-quarter profit on Tuesday, as an increase in expenses overshadowed "better-than-the-market" automotive demand.
The company's consolidated net profit for the January-March quarter fell 7% to 1.08 billion rupees ($12.8 million) from a year ago. Analysts on average had estimated it to rise to 1.37 billion rupees, according to data compiled by LSEG.
Revenue from operations rose about 3% to 18.17 billion rupees during the quarter, surpassing the estimate of 17.69 billion rupees.
For further earnings highlights, click
KEY CONTEXT
Kansai is the first among the big paintmakers in India to report its quarterly results. Larger rival and market leader Asian Paints (ASPN.NS), opens new tab is due to report its earnings later this week.
Indian paintmakers have been grappling with weak retail demand as shoppers pivoted towards cheaper alternatives amid tighter competition following the entry of Grasim Industries (GRAS.NS), opens new tab.
However, analysts have noted that Kansai's diverse client base, which includes automakers, makes the company less exposed to the risks of retail demand slowdown, compared to some of its peers such as Asian Paints.
In the reported quarter, automobile sales from makers to dealers rose across two-wheelers, three-wheelers, passenger and commercial vehicles, data shows, opens new tab.
PEER COMPARISON
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
JANUARY-MARCH STOCK PERFORMANCE
-- All data from LSEG
-- $1 = 84.2690 Indian rupees
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