Kansai Nerolac
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Kansai Nerolac Paints is strategically focusing on premiumization and expanding its industrial coatings capacity, which is expected to drive revenue growth and improve margins over the next 12-24 months. Management's emphasis on high-value segments, particularly in automotive and industrial coatings, aligns with Vista's forecast of stable revenue growth and an anticipated EBITDA margin of 13-14%. The company's INR 601 crore capex plan aims to enhance operational efficiency and capacity, supporting a projected sales CAGR of 8.6% and EPS CAGR of 10.9% through FY28. However, challenges such as rising crude oil prices and competitive intensity in the decorative segment may pressure margins and volume demand. The macroeconomic environment remains cautious, with inflationary pressures and liquidity concerns potentially impacting consumer sentiment. Overall, while the outlook is supported by strong demand in urban and rural markets, stakeholders should monitor input cost volatility and competitive dynamics closely
Why We Like This Stock
- Strategic capex investment in industrial coatings is expected to enhance operational efficiency and capacity
- Management's focus on premiumization is likely to improve margins and sustain competitive positioning
- Strong demand growth in urban and rural markets supports a positive revenue outlook
Things To Watch Out For
- Rising crude oil prices may exert margin pressure and impact profitability
- Intense competition in the decorative segment could limit aggressive pricing actions
- Potential supply chain disruptions and geopolitical risks may affect operational stability
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 7,801 | 7,823 | 8,052 | 8,491 | 8,939 |
| Profit Before Tax (Cr.) | 858 | 788 | 860 | 862 | 952 |
| PBT Margin | 11.0% | 10.1% | 10.7% | 10.1% | 10.6% |
| Net Profit (Cr.) | 663 | 630 | 626 | 624 | 674 |
| Earnings Per Share | 8.3 | 8.2 | 7.9 | 7.5 | 8.3 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| 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 |
| Geojit Financials | ► Add | 240 | 14-May-2026 |
| HDFC Securities | ▼ Reduce | 220 | 07-May-2026 |
| Investec | ▲ Buy | 250 | 07-May-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.