BENGALURU, August 3 – Indian paintmaker Kansai Nerolac on Thursday reported a nearly 42% jump in profit, helped by robust demand in its decorative paint segment.
The company, owned by Japan’s Kansai Paint Co, said consolidated profit before exceptional items and tax rose to 2.95 billion rupees ($35.7 million) for the quarter ended June 30, compared to 2.08 billion a year earlier.
Revenue from operations rose more than 5% to 21.57 billion rupees.
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KEY CONTEXT
Prices of crude, a key raw material for paintmakers, comprising about 30% of input costs, declined 13% in the quarter, partly aiding larger peer Asian Paints to also book a jump in profit.
Kansai Nerolac, which posted higher profit in three quarters of fiscal 2023, faces stiff competition from rivals like Berger Paints and Indigo Paints in India’s increasingly aggressive paint market, with new names like Pidilite Industries and J.K. Cement also preparing to enter the segment.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months)
RIC PE EV/EBIT Revenue Profit Mean # of Stock to Div
DA growth growth rating* analysts price yield
target** (%)
Kansai Nerolac Paints Ltd 39.36 22.91 11.01 30.85 Hold 12 1.08 0.53
Berger Paints India Ltd 55.71 34.60 11.21 25.81 Hold 22 1.16 0.45
Indigo Paints Ltd 46.17 28.40 19.22 16.79 Hold 7 1.03 0.23
Asian Paints Ltd 58.72 39.28 10.05 20.89 Hold 38 1.01 0.76
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
— All data from Refinitiv
— $1 = 82.7210 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Sonia Cheema)
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