India's Kansai Nerolac posts Q2 profit rise on lower expenses

Berger Paints India

01/11/2023 13:57

BENGALURU, Nov 1 (Reuters) - Indian paintmaker Kansai Nerolac  KANE.NS  reported a rise in second-quarter profit on
Wednesday as a drop in raw material costs more than made up for slowing revenue growth.
     The company, owned by Japan's Kansai Paint Co  4613.T , said its consolidated net profit rose 56% to 1.77 billion rupees
($21.26 million) for the three months ended Sept. 30. 
     Revenue from operations rose 1.3% to 19.57 billion rupees, while the cost of raw materials fell more than 8%.
     For further results highlights, click  FWN3C2228 

        
  
        WHY IT MATTERS
    
Overall, the sector has been on the road to recovery, led largely by easing crude prices - a key raw material for paintmakers,
comprising about 30% of their input costs.
    Kansai Nerolac's profit rose in the last two quarters on robust demand for its decorative paints after a tough
October-December quarter last year, when an extended monsoon hurt quarterly profit.
    Peer Asian Paints  ASPN.NS  also reported easing margins and a 54% rise in net profit in the September quarter, even though it
missed estimates.
    
    PEER COMPARISON
                               Valuation (next 12 months)    Estimates (next 12             Analysts' sentiment           
                                                                  months)                                                 
                       RIC     PE      EV/EBIT  Price/Sal  Revenue      Profit     Mean      # of          Stock to       Div
                                       DA       es         growth       growth     rating*   analysts      price          yield
                                                                                                           target**       (%)
 Kansai Nerolac        KANE.N   32.78    21.09  NULL          10.98       21.81    Buy                 12      0.91           0.57
 Paints Ltd            S                                                                                                  
 Asian Paints Ltd      ASPN.N   51.10    34.63  NULL          10.49       15.22    Hold                34      0.92           0.89
                       S                                                                                                  
 Berger Paints India   BRGR.N   47.52    30.13  NULL          11.35       22.10    Sell                19      0.99           0.50
 Ltd                   S                                                                                                  
 Indigo Paints Ltd     INDG.N   38.85    24.31  NULL          19.93       15.81    Hold                 7      0.85           0.25
                       S                                                                                                  
    
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
    
    JULY-SEPT STOCK PERFORMANCE


    -- All data from LSEG
    -- $1 = 83.2720 rupees


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KANSAI NEROLAC JULY-SEPT STOCK    https://tmsnrt.rs/45O6rLr
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 (Reporting by Anuran Sadhu in Bengaluru; Editing by Sohini Goswami)
 ((Anuran.Sadhu@thomsonreuters.com; +91 8697274436;))