Kansai Nerolac shares jump 11% on Q4 results beat, margin expansion

Kansai Nerolac share price rallied nearly 11 per cent on Thurday after posting strong Q4FY26 results. Analysts cite healthy volume growth, margin expansion, and industry recovery as key positives

Kansai Nerolac share price logged a strong rally on Thursday, May 7, after the paints company reported better-than-expected March quarter (Q4FY26) results, aided by healthy volume growth despite price hikes.

 

The stock jumped 10.8 per cent (₹223.5) on the BSE in the intraday trade, before cooling off to quote 5.3 per cent higher at ₹212.25 at 10 AM. By comparison, the BSE Sensex index was ruling 0.12 per cent higher at the same time.

 

Kansai Nerolac shares witnessed volume-backed buying today Around 0.40 million shares have changed hands on the counter, so far, higher than the stock’s two-week average volume of 0.019 million shares.

 

 

Why are Kansai Nerolac shares rising today? Q4 results explained

 

Kansai Nerolac reported a consolidated revenue of ₹1,950 crore, clocking a growth of 7.5 per cent year-on-year (Y-o-Y), driven by robust sales in both, decorative and industrial segments.

 

Its consolidated Ebitda jumped 30.6 per cent Y-o-Y to ₹216.5 crore, while adjusted net profit increased 20.7 per cent to ₹130.7 crore.

 

Kansai Nerolac’s Ebitda margin witnessed a sharp expansion of 196 basis points on year to 11.1 per cent, while gross margin rose 20bps in the quarter, as the company benefitted from lower commodity prices in January and February 2026 and lower-priced inventory in March 2026.

 

Though the company has taken some price hikes recently, the management said there is no need to raise prices if crude oil price settle ~$100/bbl.

 

It has maintained its near-term Ebitda margin guidance of 13-14 per cent. 

 

Kansai Nerolac shares: Should you buy, sell, hold?

ICICI Securities | Add | Target price: ₹230

Analysts at ICICI Securities believe FY27 could be a key turnaround year for the paint industry as well as Kansai Nerolac.

 

Recent price hikes in low-teens, which will likely drive revenue growth; Volumes reviving after muted performance over FY24-26; GST cuts and recovery in auto sector aiding industrial coatings; Kansai Nerolac’s various cost-saving initiatives and investments in new products, projects business and influencer programs, the brokerage said, should drive gains for the company in FY27-28.

 

“While commodity prices have increased materially and may impact gross margins, strong revenue growth is likely to drive operating leverage and provide margin tailwinds,” it said.

 

It also added that while Kansai’s strategy to reduce sales of low-margin products may result in lower volume growth than industry, the strategy could be margin and RoCE accretive.  Check: Top Gainers Today | Top Losers Today |  Stock Market LIVE Updates

 

HDFC Securities | Reduce | Target price: ₹220

HDFC Securities maintained its ‘Reduce’ rating on the stock as, even though recent price hikes mitigated the immediate impact on profitability, the brokerage cautions that the trajectory of future margins remains contingent on input cost volatility. 

The brokerage has, however, raised FY27 Ebitda and profit estimates by 2.4 per cent and 2.5 per cent, respectively. The same has been increased by 2.2 per cent and 0.9 per cent for FY28.    ===============  Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.