This paint company was up by 16.16% on August 2; here's why

This paint company was up by 16.16% on August 2; here's why

by 5paisa Research Team Last Updated: Dec 14, 2022 - 07:01 am 20.4k Views
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The company posted robust Q1FY23 results.

Kansai Nerolac Paints, now in its 102nd year, has been at the forefront of paint manufacturing, pioneering a wide spectrum of quality paints. It is one of the leading paint companies in India and is the leader in industrial paints. The company has eight strategically located manufacturing units all over India and a strong dealer network across the country. The company manufactures a diversified range of products ranging from decorative paint coatings for homes, offices, hospitals, and hotels to sophisticated industrial coatings for most industries.

Q1FY23 Results

The company reported net revenue of Rs 444.6 crore for the quarter, a 47.1% increase over the same quarter last year. EBIDTA was at Rs 255.6 crore, a growth of 34.7% over the same quarter of the previous year. PAT was at Rs 162.9 crore, a growth of 37% over the same quarter of the previous year.

The paint industry suffered a lot during the pandemic as well as due to geopolitical tensions. The size of the domestic paint industry is around Rs 60000 crore as of March 2022. Good growth in infrastructure, the core sector, as well as automobile and real estate, is likely to have a positive effect on the overall demand for paint for the industry in the long run.

Management Commentary

Anuj Jain, Managing Director, Kansai Nerolac Paints Ltd said, "This quarter saw a healthy demand for both Decorative and Industrial Paints. There has been a revival in demand in Industrial led by increased demand in Automotive due to the gradual easing of the chip shortages. While the inflationary trend continued towards the end of the quarter, there has been some softening of input prices for crude-based items which is yet to be reflected in derivatives. Rupee depreciated sharply during the quarter. Company has taken prices increase in Decorative and Industrial during the quarter and is in continued discussion with OEM customers for further price increase. The company focused on selling a better product mix. It continued with the aggressive cost control program and judicious management of overheads. Looking forward, with a forecast of a good monsoon, demand should remain healthy."

On Tuesday, August 2, 2022, the share price rallied by 16.16% and the scrip ended at Rs 507.15. The stock recorded a day’s high of Rs 522.25 and a day’s low of Rs 452.15. The stock has a 52-week high of Rs 674.15 and a 52-week low of Rs 358.05.

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