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Kansai Nerolac unfazed by newer entrants in market; says raw material inflation a cause of concern

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Kansai Nerolac Paints is not worried about newer players entering the paint market, Anuj Jain, executive director (ED), told CNBC-TV18. He mentioned that the recent raw material price inflation is unprecedented. While the company has hiked its prices but it's not on par with the inflation number as there's a need to balance demand and how much price increase the market can absorb.

Kansai Nerolac Paints is not worried about newer players entering the paint market, Anuj Jain, executive director (ED), told CNBC-TV18.
The company reported weak earnings for the September-ended quarter. Revenues are in line but profit after tax (PAT) is down 48 percent in this quarter, and gross margins have contracted sharply by 1,040 bps hit by raw material prices.
“Compared to other parts of the world, the number of players in the Indian market is not much. So to that extent, it’s always welcome that more players participate in the market because that helps in terms of getting more innovation in products, processes, communication and awareness,” Jain said.
On price increase, he said, “Inflation is more than 25 percent and in certain categories, it’s more than 30 percent; there are specific items where it is touching 100 percent. There are two parts of our business – decorative, which is consumer products and the other is industrial.”
“Price increase has been taken. In consumer products or decorative, the price increase was around 7 percent, which we have taken so far but it cannot compensate for the inflation which has been there because one has to strike a balance between demand and see how much cost the market can absorb,” he mentioned.
However, Jain believes that challenges in the industrial and auto sector are likely to continue.
For the entire management interview, watch the video.