Kansai Nerolac share pops 6% as Q3 profit skyrockets 341% YoY; details here

The rise in the share price came after Kansai Nerolac's consolidated profit zoomed 341.4 per cent year-on-year (Y-o-Y) to Rs 680.9 crore in Q3FY25, from Rs 154.3 crore in Q3FY24

Kansai Nerolac share price: Kansai Nerolac share price soared as much as 5.54 per cent to hit an intraday high of Rs 258.75 per share on Thursday, February 6, 2025.

 

However, at 12:42 PM, Kansai Nerolac share price were off day’s high and were trading 3.37 per cent higher at Rs 253.40 per share. In comparison, BSE Sensex was trading 0.29 per cent lower at 78,047.34 levels.

 

The rise in the share price came after the company’s consolidated profit zoomed 341.4 per cent year-on-year (Y-o-Y) to Rs 680.9 crore in Q3FY25, from Rs 154.3 crore in Q3FY24. 

 

The revenue rose marginally (up 0.2 per cent Y-o-Y) to Rs 1,921.9 crore in Q3FY25, from Rs 1,918.7 crore in Q3FY24. 

 

 

At the operating level, Ebitda slipped 3.7 per cent Y-o-Y to Rs 235.1 crore in Q3FY25, from Rs 244 crore a year ago. Ebitda margin squeezed 50 basis points (bps) to 12.2 per cent in Q3FY25, from 12.7 per cent in the same quarter last year.

 

Anuj Jain, managing director of Kansai Nerolac Paints said, “The company continued to see good growth in Paint+ products, projects, wood coatings and construction chemicals. Demand in Decorative was impacted due to higher inflation leading to lower spend on discretionary products and tight liquidity. We are seeing a gradual recovery in demand. Automotive growth was better than the market, based on several internal initiatives. Performance coatings registered strong growth due to a good order pipeline. The various strategic initiatives undertaken have led to a better than market performance across all businesses.”

 

Jain added, “Ebitda improved during the quarter over the corresponding quarter of the previous year. The improvement was driven by improvement in mix, cost optimization and control on overheads. Going forward, it is expected that the recent budget announcements will help improve the consumption cycle which would positively impact demand.” 

 

Post results, analysts at InCred Equities, in a First Cut note, said that consolidated net sales was flat Y-o-Y, in line with their estimates. Ebitda/Adjusted PAT declined 3.7 per cent/66.7 per cent Y-o-Y, respectively, while Ebitda margin contracted 50 bps to 12.2 per cent, surpassing their estimates. Therefore, analysts maintained their ‘Reduce’ rating on the stock.

 

According to reports, Morgan Stanley maintained an ‘Underweight’ rating with a  target price of Rs 250. Macquarie, on the other hand, maintain ‘Neutral’ rating with a target of Rs 225.

 

Paint industry outlook

 

The size of the domestic paint industry is estimated at around Rs 75,000 crore as of March 2024. The good growth in infrastructure, core sector as well as automobile and real estate is likely to have a positive effect on the overall demand of paint for the industry in the long run, Kansai Nerolac said in a statement.