Auto paints major Kansai Nerolac is targeting 15 per cent revenue growth this year, a top company official has said.
"On the topline, we expect to have 12-15 per cent growth over our last year's net sales of Rs 2,600 crore," said company's Managing Director H M Bharuka.
Kansai Nerolac is the second largest paints company in the country and leader in the auto space with close to 57 per cent market share.
Bharuka, however, said demand from auto sector is sluggish due to poor sales amid high interest rate scenario.
"There is general sluggishness in the market both in auto as well as decorative segments. In the decor segment we expect it should be better than what it had been so far but for auto it will depend on interest rates," Bharuka said.
He said the demand is also quite muted in the realty space because of the high prices. "I don't see a change in demand from the real estate sector. We expect the demand sentiment to return in the next six to eight months," he said.
The company expects the margin pressure to ease going forward, with the rupee slightly gaining strength of late.
"The rupee has appreciated and the crude price has also come down. So going forward, we expect the margin pressure to ease as the input cost comes down," he said.
The company had recently acquired a Nepal-based paint company at an investment of Rs 7.55 crore, Bharuka said.
On investment plans, he said, "We have invested close to Rs 600 crore and expansion should be complete by January. Our capacity should go up 37 per cent to 3,70,000 tonnes, so we are not looking at any other capital expansion as of now".
Its current capacity stands at 2,15,000 tonne and sells close to 2,00,000 tonne each year.
He further said the festive season could give a boost to the sales this fiscal. "October has been better than the previous month and the current quarter could be better than the second. Normally post-Diwali it slows down, but we expect it will be better after Diwali this year," he said.
The company enjoys a market share of 18 per cent in the Rs 21,000-crore domestic paints market and spends close to Rs 110 crore on marketing.