Kansai Nerolac Paints Ltd - Stock Valuation and Financial Performance

BSE: 500165 | NSE: KANSAINER | Paints | Small Cap

Kansai Nerolac Paint Share Price

235.95 1.65 0.70%
as on 07-Mar'25 16:59

DeciZen - make an informed investing decision on Kansai Nerolac Paint

Overall Rating
Bole Toh

1. Quality

2. Valuation

Undervalued

3. Price Trend

Semi Strong

Kansai Nerolac Paints stock performance -

mw4me loader
P/E Ratio (SA):
19.09
Market Cap:
19,075.3 Cr.
52-wk low:
218.4
52-wk high:
320.7

Is Kansai Nerolac Paints Ltd an attractive stock to invest in?

1. Is Kansai Nerolac Paints Ltd a good quality company?

Past 10 year's financial track record analysis by Moneyworks4me indicates that Kansai Nerolac Paints Ltd is a good quality company.

2. Is Kansai Nerolac Paints Ltd undervalued or overvalued?

The key valuation ratios of Kansai Nerolac Paints Ltd's currently when compared to its past seem to suggest it is in the Undervalued zone.

3. Is Kansai Nerolac Paints Ltd a good buy now?

The Price Trend analysis by MoneyWorks4Me indicates it is Semi Strong which suggest that the price of Kansai Nerolac Paints Ltd is likely to Rise-somewhat in the short term. However, please check the rating on Quality and Valuation before investing.

10 Year X-Ray of Kansai Nerolac Paint:

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end.

Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Kansai Nerolac Paints Ltd has performed well in majority of the past ten years indicating its past ten year financial track record is very good

Value Creation

Value Creation Index Colour Code Guide

Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24TTM
ROCE % 25.6%51.4%28.2%26.3%21.7%19.1%18.4%12.5%15%30.8%-
Value Creation
Index
0.92.81.11.30.90.70.60.10.31.7-

Growth Parameters

Growth Parameters Colour Code Guide

Sales 3,5493,7393,9994,5875,1744,9434,7715,9497,0817,3937,418
Sales YoY Gr.-5.3%7%14.7%12.8%-4.5%-3.5%24.7%19%4.4%-
Adj EPS 3.26.45.765.56.56.44.55.98.612.4
YoY Gr.-99.1%-12.1%6.4%-9.3%19.8%-1.4%-30%30.2%45.8%-
BVPS (₹) 19.83134.738.742.446.950.451.65769.777.4
Adj Net
Profit
261520456485441528520365475692999
Cash Flow from Ops. 30239034537711062165559.1386895-
Debt/CF from Ops. 0.10.10.10.10.100000-

CAGR

CAGR Colour Code Guide

9 Years 5 Years 3 Years 1 Years
Sales 8.5%7.4%15.7%4.4%
Adj EPS 11.4%9.5%10%45.8%
BVPS15.1%10.5%11.4%22.4%
Share Price 4.4% -6% -6.5% -17%

Key Financial Parameters

Performance Ratio Colour Code Guide

Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24TTM
Return on
Equity %
17.325.417.216.413.514.613.28.810.813.516.8
Op. Profit
Mgn %
12.515.518.317.214.315.817.710.911.213.813.2
Net Profit
Mgn %
7.413.911.410.68.510.710.96.16.79.413.5
Debt to
Equity
0000000000-
Working Cap
Days
10194108124132146153146142145118
Cash Conv.
Cycle
4634253749596065717082

Recent Performance Summary

Return on Equity has increased versus last 3 years average to 16.80%

Sales growth is growing at healthy rate in last 3 years 15.72%

Net Profit has been subdued in last 3 years 9.95%

Sales growth is not so good in last 4 quarters at 1.25%

Latest Financials - Kansai Nerolac Paints Ltd.

Standalone Consolidated
TTM EPS (₹) 12.4 14.2
TTM Sales (₹ Cr.) 7,418 7,776
BVPS (₹.) 77.4 78
Reserves (₹ Cr.) 6,173 6,226
P/BV 3.05 3.02
PE 19.09 16.58
From the Market
52 Week Low / High (₹) 218.35 / 320.65
All Time Low / High (₹) 1.45 / 453.07
Market Cap (₹ Cr.) 19,075
Equity (₹ Cr.) 80.8
Face Value (₹) 1
Industry PE 47.2

Management X-Ray of Kansai Nerolac Paint:

Shareholding Pattern

Promoter's Holding & Share Pledging

Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

Event Update

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Analyst's Notes

Kansai Nerolac Paints Ltd: Q2FY24 result update - 04 Nov 2023

Particulars

Q2FY24

(Rs. Cr)

YoY Trend

Comments

Revenue

1,957

+1%

On account extended monsoon
EBITDA

273

+37%

 
EBITDA Margin

14%

+400 bps

On account of moderation in raw martial prices
PAT

175

+58%

 

At par result.     

Kansai Nerolac: Q2FY23 Result Update - 14 Nov 2022

M.Cap Rs. 23,952 cr

CMP Rs. 444 | PE ~58x

Results

INR Crore

YoY growth

Comments

Revenue

1931

19.19%

Topline growth mainly led by passenger vehicle usage expansion. Volume flattish, but value realization increasing.

EBITDA

199

22.08%

Raw material prices cooling down but inflation still a problem, 3% price hike taken.

 

 

Key Highlights:-

·         In automotive segment, introduced products in PVC sealers and underbodies, a good size market where they were not present before.

·         In performance coating segment, got approval for Ahmedabad-Mumbai bullet train project and Vande-Bharat express project.

·         In coal coating business, exited a lot of unprofitable and low margin product segments.

·         The inflation in raw material prices still continues, so 3% increase taken in price of sales.

·         In decorative paints category, getting good response from advertisement strategies like “Paint plus”, “Mission Kashmir” campaigns launched last quarter.

 

Management Outlook:-

·         The decorative paint segment has been under stress due to rains continuing longer than average, people generally tend to paint their houses after rains but before Diwali.

·         Nerofix adhesive introduced to take advantage of their distribution network and the synergy with their core business, however no special focus on this segment.

·         Trying to bet on super premium category in decorative paints as it is one of the segments where they have limited salience.

·         Waterproofing segment to grow based on both domestic and industrial applications.

·         The overall strategy is to increase the margins in Industrial paints and invest in decorative segment.

 

 

Kansai Nerolac: Vulnerable Margins as compared to the peers - 30 Jan 2018

Kansai Nerolac Paints (KNP) has market share of ~ 16% in decorative segment and ~60% in industrial paints. It also is a leading supplier for powder coatings, industrial coatings and infrastructure coating to major companies. As mentioned in the earlier note, paint companies have adverse impact on their earning due to fluctuations in crude oil prices. While the paint industry has good pricing power in decorative segment, industrial and automobile segment tend to be negotiate prices as they are informed buyers having bargaining power. KNP generates 55% of its revenues from decorative segment and 45% from automobile paints and industrial coatings segment. Hence, in case of Kansai, its gross margins are relatively lower than the peers who have higher share of decorative segment.

In the decorative segment, KNP has traditionally focuses more on mid and premium range of paints (Price being > 350-400 Rs / litre). Though, this is high margin segment, KNP faces a stiff competition from Berger India paints and Asian Paints in this segment. Also, in an attempt to increase its volumes in decorative segment, it has launched emulsion paint (low range product) product at a discount to the products of its peers. Since Kansai is smaller than the other two players, it has its limitations in pricing of decorative segment. Also, since larger chunk of the revenues comes from industrial paints, margin expansion may not be the key value driver for the company in the long run.

On the positive side, KNP has been ahead in focussing on R&D in industrial coatings segment. It also has an advantage of access to technology provided by parent company (Kansai Paints Co., Japan). It has also focused on building a brand by spending on advertising and branding. With a competent management and strong product focus, we expect KNP to have sustainable earnings growth over long term.

We like the business because, in general, paints industry can create very high return on investment sustainably. However, current stock price factors in very high growth and it trades around 48X EPS which is at cyclically high margins. Growth rate in Autos is around 10-13% CAGR and likewise in decorative segment. Additionally, the company may not have a muscle to retain high margins as crude oil prices have normalized to fair levels. But we believe it would continue generating high Returns on equity.

We have been cautious and recommend SELL as the past 20 year analysis of the company’s data suggests there’s could be a drastic hit on the net margin level during the upcycle of the crude oil prices. 

Key Ratios of Kansai Nerolac Paint

Adj EPS (Rs.)

Sales (Cr.)

ROE (%)

ROCE (%)

Profit And Loss

(All Figures are in Crores.)
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Sales3,5493,7393,9994,5875,1744,9434,7715,9497,0817,393
Operating Expenses 3,1043,1593,2693,7974,4324,1623,9275,3026,2876,370
Manufacturing Costs344373395459525448456603658638
Material Costs2,1192,0902,0712,4472,9262,7282,6053,6444,4404,289
Employee Cost 143157182210238269269312334402
Other Costs 4985396216817437165987428561,041
Operating Profit 4455797307907427828446477941,023
Operating Profit Margin (%) 12.5%15.5%18.2%17.2%14.3%15.8%17.7%10.9%11.2%13.8%
Other Income 22279872622739333193
Interest 0000058101012
Depreciation 6867697690120149154165180
Exceptional Items 05350000-11-110642
Profit Before Tax 3991,0757597867136847145056501,566
Tax 127176253270246148183131164383
Profit After Tax 2728995065164675355313744861,183
PAT Margin (%) 7.7%24.0%12.7%11.3%9.0%10.8%11.1%6.3%6.9%16.0%
Adjusted EPS (₹)3.411.16.36.45.86.66.64.66.014.6
Dividend Payout Ratio (%)28%18%32%27%30%32%53%32%30%26%

Balance Sheet

(All Figures are in Crores.)
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24

Equity and Liabilities

Shareholders Fund 1,5972,5032,8053,1253,4243,7874,0774,1714,6045,637
Share Capital 54545454545454545481
Reserves 1,5432,4492,7513,0713,3713,7334,0234,1174,5505,556
Minority Interest0000000000
Debt42291810308000
Long Term Debt42291810300000
Short Term Debt0000008000
Trade Payables3225435506846325208238909381,024
Others Liabilities 383136224249246286330334534563
Total Liabilities 2,3433,2113,5974,0684,3064,5925,2385,3966,0757,225

Fixed Assets

Gross Block1,3991,4811,5701,7042,1032,6152,8463,0803,3493,577
Accumulated Depreciation4945556246987889061,0691,2041,3541,503
Net Fixed Assets9059269461,0061,3161,7081,7771,8761,9952,074
CWIP 4442142343315164206224113152
Investments 2165475535463044557703006531,459
Inventories5425726918061,0539301,1121,5321,6481,616
Trade Receivables4965255726766746758479651,1171,215
Cash Equivalents 3447825036181166838195230
Others Assets107122443330563494444418455479
Total Assets 2,3433,2113,5974,0684,3064,5925,2385,3966,0757,225

Cash Flow

(All Figures are in Crores.)
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Cash Flow From Operating Activity 30239034537711062165559386895
PBT 3991,0757597867136847145056501,566
Adjustment 51-489-91840108145111158-509
Changes in Working Capital -2652-181-154-345-15-56-407-24668
Tax Paid -121-249-224-273-298-156-149-151-176-230
Cash Flow From Investing Activity -239145-567-15586-344-465251-274-636
Capex -90451-204-333-523-217-98-21452377
Net Investments -155-320-359159672-90-349461-267-823
Others 715-319-64-37-194-58-190
Cash Flow From Financing Activity -85-91-212-206-178-192-276-324-89-187
Net Proceeds from Shares 0000000000
Net Proceeds from Borrowing -150-13-10-9-60000
Interest Paid 000000-1000
Dividend Paid -59-75-164-162-140-140-237-283-54-146
Others -10-16-34-34-29-46-37-41-35-42
Net Cash Flow -21444-433171885-86-142472
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Ratios
ROE (%)17.9943.8519.0617.4214.2714.8513.499.0811.0923.1
ROCE (%)25.5951.428.2426.3121.6919.0618.3512.4815.0430.76
Asset Turnover Ratio1.831.661.451.361.361.231.091.251.381.24
PAT to CFO Conversion(x)1.110.430.680.730.241.161.230.160.790.76
Working Capital Days
Receivable Days41404144434552504852
Inventory Days51444753606670737372
Payable Days66769692827794867379

Kansai Nerolac Paints Ltd Stock News

Kansai Nerolac Paints Ltd FAQs

Company share prices are keep on changing according to the market conditions. The closing price of Kansai Nerolac Paint on 07-Mar-2025 16:59 is ₹235.9.
Market capitalization or market cap is determined by multiplying the current market price of a company's shares with the total number of shares outstanding. As of 07-Mar-2025 16:59 the market cap of Kansai Nerolac Paint stood at ₹19,075.3.
The latest P/E ratio of Kansai Nerolac Paint as of 07-Mar-2025 16:59 is 19.09.
The latest P/B ratio of Kansai Nerolac Paint as of 07-Mar-2025 16:59 is 3.05.
The 52-week high of Kansai Nerolac Paint is ₹320.6 and the 52-week low is ₹218.3.
The TTM revenue is Trailing Twelve Months sales. The TTM revenue/sales of Kansai Nerolac Paint is ₹7,418 ( Cr.) .

About Kansai Nerolac Paints Ltd

Kansai Nerolac Paints was incorporated in 1920 as Gahagan Paints and Varnish Company. Later in 1930, three British companies were merged and Lead Industries Group was established. Today Kansai Nerolac Paints is amongst the leading paint companies in India.

Business area of the company

Kansai Nerolac Paints is amongst the leading paint companies in India. The company offers a range of products, including decorative, automotive coatings and performance coatings.

Products offered by the company

  • Nerolac Decorative Paints
  • Interior Wall Paints
  • Exterior Wall Paints
  • Wood Coatings
  • Metal Enamel Paints
  • Paint Ancillary
  • Adhesive
  • Hygiene care range

Awards

2011-2012

  • Certificate of Merit - Lote Zero Accident Frequency Rate.
  • Ace award- Best run business in Consumer Trade. 
  • Product of the year - Impressions Eco Clean.

2012-13

  • Environment Award-KNPL Bawal-Silver. 
  • Green Vendor Developer Program. 
  • Best business HR case study.

2013-14

  • Certificate of Merit - Lote [Zero Accident Frequency Rate. 
  • Vendor Performance award. 
  • Outstanding Contribution to Supply Chain Management. 
  • Best Quality Performance in Proprietary Items.

2014-15

  • Bawal plant - Gold,Safety. 
  • Best Vendor Award.
  • Design award for Ambient Media Category (Rang De Patang). 
  • Best Vendor in Safety Award-Bawal. 
  • Certificate of Excellence for Achieving Quality Targets.
  • Safety Systems Excellence Award. 

2015-16

  • Award for achieving the highest growth in refinish business. 
  • Best Eco Kaizen-Hosur.
  • Most Innovative Product of the Year Award-Nerolac Impressions HD.

Milestones

  • 1920- Gahagan Paints and Varnish Company was incorporated.
  • 1930- Lead Industries Group was established by merger of three British companies.
  • 1933- Lead Industries Group acquired 100% stake of Gahagan Paints and the company was renamed as Goodlass Wall (India)
  • 1946- Goodlass Wall was converted in private limited company.
  • 1957- Goodlass Wall was renamed as Goodlass Nerolac Paints and went public in the same year.
  • 1976- After acquisition Goodlass Nerolac Paints became part of Tata Forbes Group.
  • 1983- Goodlass Nerolac Paints entered into technical collaboration with Kansai Paint Co. and Nihon Tokushu Toryo Co. of Japan.
  • 1986- Goodlass Nerolac Paints Ltd. turned into a joint venture of the Tata Forbes and the Kansai Paint Co., with the latter acquiring 36% stake in the company.
  • 1999-Kansai Paint Company, Japan acquired the entire stake of Tata Forbes group and thus Goodlass Nerolac Paints became a wholly owned subsidiary of Kansai Paint Company.
  • 2006- Goodlass Nerolac Paints was rechristened to Kansai Nerolac Paints.
  • 2012- Kansai Nerolac decided  to enter JV with Nepal Shalimar, to acquire 68% stake in Nepalese paint major.
  • 2015- Kansai Nerolac Paints to enter Sri Lankan market.
  • 2015- Kansai Nerolac decided to set up a manufacturing unit in Gujarat at an estimated cost of Rs 350 crore.
  • 2019- Kansai Nerolac Paints starts commercial production at manufacturing unit in Punjab.
  • 2019- Kansai Nerolac launches 'Shera Para Shera Pujo 2019' campaign.
  • 2020- Kansai Nerolac Paints, Polygel complete acquisition of stake in Nerofix.
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