Kansai Nerolac Paints Ltd today reported 3.79 per cent decline in net profit at Rs 60.9 crore for the first quarter ended June 30, 2013, on account of subdued demand.

The company had posted a net profit of Rs 63.3 crore for the same period of previous fiscal.

Net sales of the company, however, rose to Rs 789.8 crore for the first quarter, compared to Rs 720.8 crore during the same period of previous fiscal, Kansai Nerolac Paints Ltd (KNPL) said in a statement.

Commenting on the results, KNPL Managing Director, H M Bharuka said: “Demand for paint has been subdued during the quarter which is reflected in KNPL numbers. Towards June, sharp correction in the rupee has created inflationary pressure. This has ensured that pressure on input costs continue.”

Going forward uncertainty in the economy along with volatility in the rupee coupled with general subdued sentiment makes the immediate future very challenging both in terms of topline and profitability, Bharuka added.

“We will have to wait and watch as to how these factors will play out and hence the outlook for the short term remains cautious. Overall, however, the picture of paint demand remains very positive over the long term,” he said.

In a separate filing to the BSE, the company said its board has approved to close its factory at Perungudi, Chennai.

“Being an old unit the plant and machinery of this unit had become outdated and unproductive,” the company said, adding that all the workmen of the unit have opted for voluntary retirement scheme.

Shares of KNPL today closed at Rs 1,175.30 a piece on the BSE, down 0.44 per cent from the previous close.

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