India's Kansai Nerolac posts higher profit for fourth straight quarter

Berger Paints India

05/02/2024 10:14

BENGALURU, Feb 5 (Reuters) - India's Kansai Nerolac Paints  KANE.NS  reported a bigger profit for
the fourth consecutive quarter on Monday, boosted by strong demand for decorative and industrial coatings.
    The company, owned by Japan's Kansai Paint Co  4613.T , said consolidated net profit rose 40%
year-over-year to 1.54 billion rupees ($18.5 million) in the third quarter.
    Revenue from operations rose 5% to 19.19 billion rupees.
    For further earnings highlights, click  urn:newsml:reuters.com:*:nFWN3EP02P
    
    KEY CONTEXT
    Paintmakers have benefited from growing activity in the country's real estate sector and an easing in
prices of crude, a key raw material that accounts for about a third of input costs.
    Kansai Nerolac said it expects rural demand to pick up going forward, although larger peer Asian Paints
 ASPN.NS  has warned that demand may soften in the next two quarters as buyers defer home painting plans.
    Besides that, there is stiff competition from the rivals such as Berger Paints  BRGR.NS  and Indigo
Paints  INDG.NS , while the likes of Pidilite Industries  PIDI.NS  and J.K. Cement  JKCE.NS  also preparing
to enter the sector.
    
PEER COMPARISON 
    
                               Valuation (next    Estimates (next 12   Analysts' sentiment         
                                 12 months)            months)                                     
                  RIC         PE      EV/EBITDA  Revenue     Profit    Mean     # of     Stock to  Div
                                                 growth %    growth %  rating*  analyst  price     yield
                                                                                s        target    (%)
                                                                                         **        
 Kansai Nerolac    KANE.NS     33.40      21.76    10.19      10.89    Hold          11    0.98        0.53
 Asian Paints      ASPN.NS     49.61      33.77     9.52       6.60    Hold          33    0.89        0.90
 Berger Paints     BRGR.NS     47.95      31.21    10.68      13.27    Sell          20    1.05        0.47
 Indigo Paints     INDG.NS     38.51      23.70    19.41      18.26    Hold           6    0.89        0.25
 * The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is
trading above the PT
    
OCTOBER-DECEMBER STOCK PERFORMANCE 
    
    
-- All data from LSEG
-- $1 = 83.0534 Indian rupees

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KANSAI NEROLAC OCT-DEC STOCK PERFORMANCE    https://tmsnrt.rs/3HM4aHe
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 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Savio D'Souza)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))