India's Kansai Nerolac's Q1 profit jumps on strong paint demand

Kansai Nerolac Paints

03/08/2023 10:49

BENGALURU, August 3 - Indian paintmaker Kansai Nerolac  KANE.NS  on Thursday reported a nearly 42% jump in profit,
helped by robust demand in its decorative paint segment. 
    The company, owned by Japan's Kansai Paint Co  4613.T , said consolidated profit before exceptional items and tax rose
to 2.95 billion rupees ($35.7 million) for the quarter ended June 30, compared to 2.08 billion a year earlier.
    Revenue from operations rose more than 5% to 21.57 billion rupees.  
       
    For further earnings highlights, click  urn:newsml:reuters.com:*:nL8N39K3HI
    
KEY CONTEXT 
   Prices of crude, a key raw material for paintmakers, comprising about 30% of input costs, declined 13% in the quarter,
partly aiding larger peer Asian Paints  ASPN.NS  to also book a jump in profit. 
    Kansai Nerolac, which posted higher profit in three quarters of fiscal 2023, faces stiff competition from rivals like
Berger Paints  BRGR.NS  and Indigo Paints  INDG.NS  in India's increasingly aggressive paint market, with new names like
Pidilite Industries  PIDI.NS  and J.K. Cement  JKCE.NS  also preparing to enter the segment. 

    
PEER COMPARISON 
    
                                         Valuation (next   Estimates (next 12           Analysts' sentiment         
                                           12 months)           months)                                             
                              RIC        PE      EV/EBIT  Revenue      Profit    Mean      # of      Stock to       Div
                                                 DA       growth       growth    rating*   analysts  price          yield
                                                                                                     target**       (%)
 Kansai Nerolac Paints Ltd     KANE.NS    39.36    22.91     11.01      30.85    Hold            12      1.08           0.53
 Berger Paints India Ltd       BRGR.NS    55.71    34.60     11.21      25.81    Hold            22      1.16           0.45
 Indigo Paints Ltd             INDG.NS    46.17    28.40     19.22      16.79    Hold             7      1.03           0.23
 Asian Paints Ltd              ASPN.NS    58.72    39.28     10.05      20.89    Hold            38      1.01           0.76
    
* 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
    
APRIL-JUNE STOCK PERFORMANCE 
    
    
-- All data from Refinitiv

-- $1 = 82.7210 Indian rupees

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 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Sonia Cheema)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))