BQ Prime'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 BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
Kansai Nerolac Paints Ltd.'s Q2 FY24 results were below our estimate. Revenue increased by 1.3% YoY was better compared to Asian Paints Ltd. (0.2% YoY growth).
During the quarter, industrial business reported high single digit growth but decorative business posted low single digit decline. Ex-putty decorative business posted flat revenue growth.
Gross margin expanded by 680 basis points YoY to 35.6%. Going ahead, Kansai plans to focus on high margin products which would augment margins. In addition, deflation in key commodities and less price pass on would help expand gross margin.
We have maintained our FY24/25E earnings per share estimates at Rs 9.1/10.0 as we believe that the lower sales in Q2 will get covered in Q3.
Also, we have introduced FY26E EPS at Rs 11.2. Going ahead, we believe that the company would perform better than peers due to margin led tailwinds in industrial.
Valuing Kansai at 36 times FY26E EPS to arrive at a target price of Rs 400. Maintain 'Buy'.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime 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 BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.