Kansai in good hues

Kansai Nerolac is the top gainer on the BSE currently, opening over 4% higher at Rs.455.50, rising to an intraday high at Rs.522.25, just a whisker away from its 20% UC of the day at Rs.523.90. Its 52-week high is at Rs.674.15.

The market has obviously given a thumbs up to its performance for Q1FY23. Its net revenue rose 47% (YoY) at Rs.1945 crore with EBITDA coming in at Rs.256 crore, up 35%. The company ended the quarter with a 37% jump in PAT at Rs.163 crore.

The overall good performance was aided by 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.

The company said, “While 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.”

 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 said that with a forecast of a good monsoon, demand should remain healthy.

The size of domestic paint industry is estimated at around Rs. 60000 crores as of March 2022. 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.