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    Add Kansai Nerolac Paints, target price Rs 550: HDFC Securities

    Synopsis

    Kansai Nerolac Paints Ltd., incorporated in the year 1920, is a Large Cap company (having a market cap of Rs 26862.45 Crore) operating in Building Materials sector.

    BuyThinkStock Photos
    Promoters held 74.99 per cent stake in the company as of 30-Jun-2022, while FIIs owned 3.28 per cent, DIIs 13.39 per cent.
    HDFC Securities has add call on Kansai Nerolac Paints with a target price of Rs 550. The current market price of Kansai Nerolac Paints is Rs 494.5. Time period given by analyst is one year when Kansai Nerolac Paints Ltd. price can reach defined target.

    Kansai Nerolac Paints Ltd., incorporated in the year 1920, is a Large Cap company (having a market cap of Rs 26862.45 Crore) operating in Building Materials sector.

    Kansai Nerolac Paints Ltd. key Products/Revenue Segments include Paints, Enamels, Varnishes, Other Operating Revenue and Scrap for the year ending 31-Mar-2022.


    Financials
    For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2056.20 Crore, up 33.90 % from last quarter Total Income of Rs 1535.63 Crore and up 45.55 % from last year same quarter Total Income of Rs 1412.70 Crore. Company reported net profit after tax of Rs 152.05 Crore in latest quarter.

    Investment Rationale
    Kansai Nerolac’s (KNPL) standalone revenue grew 49% YoY (INR19.4bn, three-year CAGR: 10%; HSIE: INR18.7bn). In decorative segment, volume/realisation is estimated to have clocked ~21/22% resp YoY in Q1. Underperformance vis-a- vis the top-2 players reduced and management highlighted its focus on recouping lost share via (1) increasing salience in premium products and (2) flexing the marketing lever, going forward. Industrial segment is estimated to have outpaced portfolio growth (HSIE: ~52%). Profitability was broadly in line (GM/EBITDAM at 29.9/13.1% vs HSIE: 30/13.7%). While the brokerage revises FY24/25 EPS estimates marginally (2% each), we downgrade the stock to ADD (earlier BUY) as it suspects risk-reward is evenly matched now (post the recent stock run-up) in the wake of new competition.

    Promoter/FII Holdings
    Promoters held 74.99 per cent stake in the company as of 30-Jun-2022, while FIIs owned 3.28 per cent, DIIs 13.39 per cent.



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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