I-Sec maintains Add on Kansai Nerolac Paints, raises target price to Rs 267

ICICI Securities has maintained the Add call on Kansai Nerolac Paints with a revised target price of Rs 267 (earlier Rs 250). The current market price of Kansai Nerolac Paintsis Rs 256.75. Kansai Nerolac Paints, incorporated in 1920, is a Large Cap company with a market cap of Rs 20,696.19 crore, operating in the Building Materials sector.

Kansai Nerolac Paints' key products/revenue segments include Paints, Enamels, Varnishes, Scrap and Other Operating Revenue for the year ending 31-Mar-2024.

Financials

For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 1853.74 crore, down -5.59 % from last quarter Total Income of Rs 1963.42 crore and up 2.88 % from last year same quarter Total Income of Rs 1801.92 crore. The company has reported net profit after tax of Rs 102.43 crore in the latest quarter.

The company's top management includes Mr.Pradip Panalal Shah, Mr.Anuj Jain, Mr.Bhaskar Bhat, Mr.Pravin Chaudhari, Ms.Sonia Singh, Mr.Takashi Tomioka, Mr.Hitoshi Nishibayashi. Company has SRBC & Co LLP as its auditors. As on 31-03-2025, the company has a total of 81 Crore shares outstanding.


Investment Rationale
ICICI Securities believes Kansai Nerolac Paints is likely to be relatively protected from steep competitive pressures in decorative paints, as it generates ~45% of its revenue from industrial coatings. The brokerage maintains ADD with a DCF-based revised target price of Rs 267 (implied P/E of 30x FY27E EPS; earlier target price Rs 250). Historically, the stock has traded at an average one-year forward P/E of 40x. Key risks are higher raw material prices, failure of new product launches and steep increase in competitive pressures are key risks to our estimates.

Promoter/FII Holdings
Promoters held 74.98 per cent stake in the company as of 31-Mar-2025, while FIIs owned 5.3 per cent, DIIs 10.1 per cent.