Accumulate Kansai Nerolac Paints; target of Rs 459: Geojit

Geojit recommended reduce rating on Kansai Nerolac Paints with a target price of Rs 459 in its research report dated May 12, 2023.

Broker Research

May 13, 2023 / 22:14 IST

reduce

26 Aug, 2025 12:21

Volume

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Geojit's research report on Kansai Nerolac Paints

Kansai Nerolac Paints (KNPL) is the market leader in industrial paints and the third largest decorative paint company in India. In Q4FY23, top-line grew by 13% YoY, led by healthy demand in the industrial paints and decorative segment. Gross margin improved by 397bps YoY to 31.9% owing to price hike in industrial paints and benign raw material prices. EBITDA margin improved by 424bps YoY to 9.7% in Q4FY23. The decorative and industrial paints volume grew by double digit due to new product launches and strong demand from automotive OEMs. The management is focusing to improve its market share in decorative business and expects the segment to grow faster than industrial paints.

Outlook

We expect margins to improve in the coming quarters on account of price hikes from auto OEMs and a fall in input prices. We reiterate Accumulate rating and value KNPL at 32x on FY25E EPS with a target price of Rs. 459.

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