Accumulate NIIT Technologies; target of Rs 670: Prabhudas Lilladher

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26 Aug, 2025 12:21

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KNPL’s strong performance continued with 16.2% sales growth led by 18% volume growth. Early onset of festival season and post GST re-stocking enabled 20% volume growth in decorative paints. Strong durable re-stocking and strong auto OEM volumes provided flip to Industrial paints. While KNPL’s raw material basket witnessed some relief in Q2 with TiO2 prices declining by 7.7%, overall input cost inflation and availability remains an issue due to geo-political uncertainty. Given higher YoY input costs and 2-3% higher taxes under GST, we expect some price increases post festival season. Demand outlook remains positive due to expected uptick in real estate, infrastructure and automobiles; KNPL expects double-digit volume growth to sustain for quite some time. Although margin expansion from current levels looks difficult, strong volume growth will prevent any sharp decline in margins.

We estimate 13% PAT CAGR over FY17-19 and arrive at 18-month price target of Rs520 based on 37xFY20 EPS. Maintain ‘BUY’.

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