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Kansai Nerolac Paints slips nearly 5% after CLSA downgrades to sell

Shares of Kansai Nerolac have underperformed the benchmark index Sensex in the last one year. While the S&P BSE Sensex has gained 16 per cent, the stock of Kansai Nerolac has dropped over 3 per cent.

SI Reporter  |  New Delhi 

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Shares of slipped as much as 4.67 per cent to Rs 438.95 apiece on BSE in the early trade on Friday after reports said global brokerage firm has downgraded the stock to sell from underperform.

The brokerage noted the company is set to witness demand headwinds as the is reeling under pressure. It sees the company's revenue at risk as auto OEMs (original equipment manufacturers) forms 45 per cent of its revenue. The target price has been lowered to Rs 385 from Rs 450. Rising crude oil prices is another unfavourable factor that will weigh on the company, the brokerage said. However, a stronger rupee will give the support.

has been witnessing slowdown since August last year. As a result, many companies including market leader Suzuki slashed their production by 8 per cent in February.

The auto major produced a total of 1,48,959 units, including Super Carry LCV, across its factories last month, down 8.3 per cent from 1,62,524 units produced in the year-ago period, the company said in a regulatory filing.

Hit by lower offtake by end customers, passenger vehicles (PV) retail sales declined by 8.25 per cent to 2,15,276 units in February as compared with the same period last year, automobile dealers' body FADA said last week.

Shares of Kansai Nerolac have underperformed the benchmark index Sensex in the last one year. While the S&P BSE Sensex has gained 16 per cent, the stock of Kansai Nerolac has dropped over 3 per cent during the same period.

At 10:02 am, shares were trading at Rs 449 apiece on BSE, down 2.50 per cent.

First Published: Fri, March 22 2019. 10:04 IST
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