Calcutta, Aug. 14: AkzoNobel, the makers of Dulux paints, has reported an 18 per cent fall in first-quarter net profit at Rs 45 crore compared with Rs 55 crore a year ago.

Total revenue during the quarter grew to Rs 658 crore from Rs 641 crore a year ago.

While the operating profit grew 14 per cent to Rs 61 crore, the net profit was pulled down by a special dividend payout.

AkzoNobel is a major supplier of paints to the steel sector.

Managing director Jayakumar Krishnaswamy said the company was tweaking its supply chain to cover for low demand from steel producers.

"One of the big challenges in the past quarter was cheap Chinese imports, which impacted the steel industry in India. That affected overall paint consumption," Krishnaswamy said after the company's AGM today.

The company is betting on an improved demand of decorative paints in the second half of the year with the onset of the festive season.

However, the company is also wary of the rupee's depreciation that may negate the gains from softening crude oil prices.

With the slowdown in a major market such as China, India is expected to play a key role in the Dutch paint major's global business.

Chairman Nihal Kaviratne CBE said, "AkzoNobel India has a 3 per cent share of the company's global sales. This is small but we expect this to grow rapidly."