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Paints overcome GST irritants - GST Station

Paints overcome GST irritants

Paints overcome GST irritants

Calcutta: An improvement in demand towards the end of the July-September quarter has helped paint companies to grow during the period amid GST hiccups from the previous quarter.

While Asian Paints, Berger and Nerolac have recorded double-digit growth year-on-year in standalone revenue from operations during the quarter, Akzo Nobel’s numbers have dipped.

Paint manufactures expect demand to improve in the second half of the financial year even as raw material costs remain a concern. The industry has hiked prices by around 5 per cent so far this year to counter the high cost of raw materials, such as titanium di-oxide and certain monomers.

“There was recovery from the first quarter which was affected by the impact of de-stocking because of GST. However, the impact of GST continued through July and a recovery of sorts was seen only in September,” said K.B.S. Anand, managing director and CEO of Asian Paints, adding that the early festive season has helped demand to improve.”On a sequential basis, material prices have remained stable, helped to an extent by the strong currency,” Anand said.

“In July, sales were affected for everyone. But there was recovery towards the later part of the quarter so that for the three-month period there was growth, even though it was slightly less-than-expected,” said Abhijit Roy, managing director and CEO, Berger Paints.

Roy added that raw material costs depended on several factors such as availability, stock and product mix.

“This quarter, the effect of de-stocking because of GST and preponement of sales because of an early Diwali were visible. The effect of higher raw material prices is continuing,” according to H.M. Bharuka, managing director of Kansai Nerolac.

“Headwinds because of high raw materials costs have impacted business during the quarter. Though sales returned to growth during the quarter, the pick-up has been slower than anticipated,” said Jayakumar Krishnaswamy, managing director of Akzo Nobel India.

Source- The Telegraph.