Accumulate Kansai Nerolac Paints; target of Rs 284: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Kansai Nerolac Paints with a target price of Rs 284 in its research report dated May 07, 2025.

Broker Research

May 08, 2025 / 14:22 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Kansai Nerolac Paints

KNPL has sustained 13-14% EBIDTA margin guidance and amid competitive intensity in decorative paints in the near term. Industrial Paints outlook remains positive led by 2W in auto paints and General industrial segment led by infra and related segments. KNPL plans to maintain its decorative market share led by 1) Paint + initiatives 2) distribution improvement in Nextgen Nerolac Shoppe 3) projects business 4) loyalty and influencer program and new innovations and launches. positive Outlook in non-auto industrials remains positive led by strong order pipeline across Infra, Railways, Powder coatings etc. Competitive intensity remains intense in decorative segment as full impact of new players like Birla Opus, JK Maxx and JSW is yet to play out fully. However, margins are likely to improve in FY26 given benign input costs.

Outlook

We estimate a CAGR of 6.7% in sales and 11% IN PAT over FY25-27. We value the stock at 28xMar27 EPS (No change) and assign a target price of Rs284 (Rs288 earlier). Retain Accumulate but expect backended returns.

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