India's Kansai Nerolac reports nearly 4-fold profit surge in Q4

Kansai Nerolac Paints

08/05/2023 14:44

BENGALURU, May 8 (Reuters) - Kansai Nerolac Paints Ltd  KANE.NS  reported a nearly four-fold surge
in fourth-quarter profit on Monday, helped by an increase in demand for its decorative paints and a drop in
some raw material costs. 
    The paint maker's consolidated net profit in the quarter ended March 31 rose to 937.7 million rupees
($11.5 million), from 247.3 million rupees a year earlier. 
    Revenue for the company, owned by Japan's Kansai Paint Co Ltd  4613.T , rose nearly 13% in the quarter,
while its cost of materials consumed fell over 5%.
    The company also approved the issue of one bonus share for every two shares. 
    For further earnings highlights, click  urn:newsml:reuters.com:*:nFWN3750TW
    
    WHY IT MATTERS
    
    Nerolac has reported either a dip in profit or a smaller-than-expected profit growth in three of the
last four quarters. 
    High volatility in crude, which accounts for about 30% of raw material costs, has corrected from its
2022 high of $139.13 per barrel in March last year when it inflated Nerolac's cost of materials consumed to
over 18%. 
    
    PEER COMPARISON
    
                                   Valuation (next   Estimates (next          Analysts' sentiment          
                                      12 months)       12 months)                                  
                              RIC       PE  EV/EBIT  Revenue  Profit     Mean      # of  Stock to       Div
                                                 DA   growth  growth  rating*  analysts     price     yield
                                                                                         target**       (%)
       Kansai Nerolac    KANE.NS     31.30    18.51   11.19   25.85       Buy        12    0.83        0.57
           Paints Ltd                                                                              
     Asian Paints Ltd    ASPN.NS     58.82    38.05   10.60   21.23      Hold        38    0.98        0.66
  Berger Paints India    BRGR.NS     51.33    31.86   11.23   25.73      Hold        23    1.04        0.50
                  Ltd                                                                              
    Indigo Paints Ltd    INDG.NS     41.14    24.61    19.69   24.99     Hold         7      0.96      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
    
    JAN-MARCH STOCK PERFORMANCE
        
    
    -- All data from Refinitiv
    -- $1 = 81.7850 Indian rupees
    

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Kansai Nerolac shares vs peers    https://tmsnrt.rs/3HQSxiG
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 (Reporting by Varun Vyas in Bengaluru; Editing by Nivedita Bhattacharjee and Janane Venkatraman)
 ((varunvyas.hebbalalu@thomsonreuters.com;))