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

BENGALURU (Reuters) – Indian paintmaker Kansai Nerolac 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, 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]


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 also reported easing margins and a 54% rise in net profit in the September quarter, even though it missed estimates.


Valuation (next 12 months) Estimates (next 12 Analysts’ sentiment


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


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


* 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


— All data from LSEG

— $1 = 83.2720 rupees

(Reporting by Anuran Sadhu in Bengaluru; Editing by Sohini Goswami)