On Q2FY19 performance: Kansai Nerolac reported an 11% Revenue growth in which value growth has been more than volume growth. The volume growth stood between 9-9.5% (decorative and industrial segments put together). Q2FY19 volumes were lower than Q2FY18 as the festive season in Q2FY19 got postponed by one month causing the festive led demand for decorative paints to be lower as against Q2FY18. Besides, H1FY19 also witnessed an extended monsoon season that contributed to lower volume growth on a YoY basis. However, the MD, Mr. M.Bharuka highlighted the Q3FY18 revenue growth to be far better in Q3FY18. But for the full year FY2019 the company expects to report double-digit growth in the coming 2 quarters i.e. Q3FY19 and Q4FY19. 

On Price Hikes: Mr. Bharuka said that in Q2FY19, the total quantum of price hikes taken in Decorative segment is 2%in H1FY19 and another 2.4% price hike was taken effective October 2018. On the industrials business segment price hikes have been taken and a further increase is also expected as cost increases have been very high. Typically in industrial segment price hikes are typically based on client, contractual terms and customer -to-customer 

On Margin contraction: The MD mentioned that owing to sharp rise in costs the margins in Q2FY19 took a hit and came in at 15.1% a contraction of ~400basis points led clearly by Gross Margin contraction (higher crude oil prices and rupee volatility). So, the raw material prices are not in our control and we have no idea how they will behave going ahead. Also, we can’t go to the customer every month for price increases. Obviously, we have to increase and maintain our margin, but as I have been saying earlier that if one or two quarters we don’t get margin, it doesn’t mean that is the end of the story. Paint industry is a high growth area and we expect it to continue like this. 

On Market Share in Decorative & Automotive segment: During Q2FY19, Kansai Nerolac has not lost market share in any of the segments that it is present in. In both decorative and auto, we have maintained our market share. We have no idea as of market growth, but we feel market growth will be similar. I don’t think we have lost market share anywhere said Mr. Bharuka the MD, Kansai Nerolac. 

On GST changes and negative impact on earnings: GST impact after latest round of tax changes was seen only in the first month, because GST rate was expected to come down. So dealers did a de-stocking. That was only for one month and we do not expect any negative effect because of that. So, we expect it to have a good positive effect going forward as per Mr. Bharuka.

On demand conditions shaping up in Q3FY19: So far as demand is concerned, the MD said it expects decorative demand to be definitely good. But on the auto and industrial front some slowdown is being observed. With the financial crisis, which is there right now in the market, with the liquidity crisis which is there, and the NBFC problem, we expect some slowdown in case of auto.

On RM price trends in Q3FY19: As far as input prices are concerned, maybe base raw material prices have reached the peak. But the problem is of rupee deprecation. It is very volatile and even crude oil as of now is very volatile. So, we don’t know how the prices are going to behave. We hope that the rupee stabilizes around 72-73 per dollar, but no one has any idea as of that.