India's Kansai Nerolac posts surprise quarterly profit fall as costs bite

Kansai Nerolac Paints

06/05/2025 17:24

May 6 (Reuters) - India's Kansai Nerolac Paints KANE.NS reported an unexpected decline in fourth-quarter profit on Tuesday, as an increase in expenses overshadowed "better-than-the-market" automotive demand.

The company's consolidated net profit for the January-March quarter fell 7% to 1.08 billion rupees ($12.8 million) from a year ago. Analysts on average had estimated it to rise to 1.37 billion rupees, according to data compiled by LSEG.

Revenue from operations rose about 3% to 18.17 billion rupees during the quarter, surpassing the estimate of 17.69 billion rupees.

For further earnings highlights, click nFWN3RE2H5

KEY CONTEXT

Kansai is the first among the big paintmakers in India to report its quarterly results. Larger rival and market leader Asian Paints ASPN.NS is due to report its earnings later this week.

Indian paintmakers have been grappling with weak retail demand as shoppers pivoted towards cheaper alternatives amid tighter competition following the entry of Grasim Industries GRAS.NS.

However, analysts have noted that Kansai's diverse client base, which includes automakers, makes the company less exposed to the risks of retail demand slowdown, compared to some of its peers such as Asian Paints.

In the reported quarter, automobile sales from makers to dealers rose across two-wheelers, three-wheelers, passenger and commercial vehicles, data shows.

PEER COMPARISON

Valuation (next 12 months)
Estimates (next 12 months)
Analysts' sentiment
RIC
PE
EV/EBITDA
Revenue growth (%)
Profit growth (%)
Mean rating*
# of analysts
Stock to price target**
Div yield (%)
Kansai Nerolac Paints Ltd
KANE.NS
28.09
17.64
7.77
7.40
Hold
11
0.88
0.98
Asian Paints Ltd
ASPN.NS
49.93
33.57
6.67
7.19
Hold
33
1.01
1.33
Berger Paints India Ltd
BRGR.NS
49.97
31.26
8.51
8.92
Hold
20
1.09
0.63
Akzo Nobel India Ltd
AKZO.NS
33.52
21.19
8.75
11.11
Buy
2
0.89
3.18

* 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

JANUARY-MARCH STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 84.2690 Indian rupees

KANE Q4 https://tmsnrt.rs/4d74wHk

 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Shreya Biswas)

 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))