Kansai Nerolac
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Kansai Nerolac Paints is poised for growth, driven by a strategic Rs6bn capex plan aimed at expanding its automotive and industrial coatings capacity, which is expected to enhance operational efficiency over the next 2-2.5 years. Management's focus on premiumization and digital integration, alongside a strong performance in the decorative segment, supports Vista's forecast of an 8.6% sales CAGR and a 10.9% EPS CAGR through FY28. However, the company faces challenges from high competitive intensity and potential margin pressures due to rising input costs and supply chain disruptions. Despite these headwinds, management maintains stable EBITDA margin guidance of 13-14% for FY27, indicating resilience in its operational strategy. The macro environment remains cautiously optimistic, with improving growth indicators, although inflation and foreign institutional flows present risks. Over the next 12-24 months, key opportunities include the successful execution of the capex plan and the full impact of price increases, while watchpoints include the stabilization of input costs and demand fluctuations in the decorative segment
Why We Like This Stock
- Strategic Rs6bn capex plan to enhance automotive and industrial coatings capacity
- Strong performance in decorative innovations and project business, driving revenue growth
- Stable EBITDA margin guidance of 13-14% for FY27, reflecting operational resilience
Things To Watch Out For
- High competitive intensity in the decorative segment may pressure margins
- Potential margin pressures from rising input costs and supply chain disruptions
- Uncertainty regarding demand stability in the face of macroeconomic headwinds
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 7,801 | 7,823 | 8,052 | 8,508 | 9,029 |
| Profit Before Tax (Cr.) | 858 | 788 | 860 | 897 | 983 |
| PBT Margin | 11.0% | 10.1% | 1068.1% | 10.5% | 10.9% |
| Net Profit (Cr.) | 663 | 630 | 626 | 650 | 696 |
| Earnings Per Share | 8.3 | 8.2 | 7.9 | 7.9 | 8.6 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Geojit Financials | ► Add | 240 | 14-May-2026 |
| HDFC Securities | ▼ Reduce | 220 | 07-May-2026 |
| Investec | ▲ Buy | 250 | 07-May-2026 |
| Macguire | ► Neutral | 215 | 04-Aug-2026 |
| Morgan Stanley | ▼ Underweight | 193 | 04-Aug-2026 |
| Nomura | ▲ Buy | 300 | 04-Aug-2026 |
| Prabhudas Liladhar | ► Accumulate | 259 | 04-Aug-2026 |
Company Overview
Show Company Profile
Kansai Nerolac Paints Limited engages in the manufacture and supply paints, varnishes, enamels, and lacquers in India. It provides interior and exterior wall paints, wood coatings, metal enamel paints, and ancillary paints, as well as adhesives and waterproofing products; interior textures; general industrial, powder, coil, automotive, auto refinish, and floor coatings; wood finishes, waterproofing solutions, and construction chemicals; and decorative and soldier paints. The company also offers painters, background check, guidance, color consultation, on-site sanitation, quotation, and color selection tools services. It serves residential, commercial, retail, industrial, governmental, and institutional customers, as well as automotive, consumer durables, machinery, equipment, and structural industries. The company was formerly known as Goodlass Nerolac Paints Limited and changed its name to Kansai Nerolac Paints Limited in April 2006. The company was incorporated in 1920 and is headquartered in Mumbai, India. Kansai Nerolac Paints Limited is a subsidiary of Kansai Paint Co., Ltd.