Kansai reported revenue growth of 2.7% YoY. However, Ebitda and adjusted PAT declined 7.4% and 7.2%, respectively YoY. Gross margin expanded 22 bps with correction in commodity prices. Even so, Ebitda margin contracted 99 bps YoY due to higher staff cost and other expenditure as % of net sales. ICICI Securities believes, there is negative impact of operating leverage with 10 straight quarters of low-single-digit YoY revenue growth.
NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Kansai Nerolac Paints Ltd. has been focussing on introducing multiple new products/technologies in industrial coatings over the past two–three years. This has led to market share gains in automotive coatings and strong growth in protective coatings.
We like Kansai’s strategy to focus on market share gains in industrial coatings (less competitive segment) given competition has intensified materially in decorative paints. We also like its aggressive focus on expansion of share-of-voice and new launches to strengthen decorative paints.
With correction in commodity prices and FY25’s favourable base, we see Kansai’s FY26E revenue/PAT growth in mid-single-digits. QoQ recovery in offtake of decorative paints and sustained growth in projects segment also augur well.
Sale of land parcels at Thane and Parel (Mumbai) should drive other income higher. Maintain Add.
We reckon [comfortable] competitive equilibrium in paints is likely broken. Retain underweight on large cap paints. Contrarian investors may consider owning Akzo Nobel/Indigo Paints/Kansai Nerolac.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
RECOMMENDED FOR YOU
Tech Mahindra Gets 'Reduce' From ICICI Securities Post Q1 Results With 7% Potential Downside
Jul 17, 2025
India's Unemployment Rate Stays At 5.6% In June Despite Modest Uptick In Urban Areas
Jul 15, 2025
'Hold' Polycab Shares Maintains Nirmal Bang, Says Execution, Favorable Industry Tailwinds To Drive Growth
Jul 09, 2025
TCS, Mphasis — Top Stock Picks By ICICI Securities Ahead Of IT Q1 Results
Jul 02, 2025
POPULAR