Kansai Nerolac Paints: Prabhudas Lilladher Maintains Buy Rating, Targets ₹248
Kansai Nerolac Paints Research Report
Summary
Kansai Nerolac Paints (KNPL) is expected to see increased focus on the Industrial paints/Auto paints segment, with a revenue share increase in the medium term. The company attributes this growth to sustained high growth in Automotive Paints, Auto refinishes, Powder coatings, and strong traction in emerging segments.
Business Strategy
Read also: Oshea Herbals Aims for Rs 650 Crore Revenue Amidst Expansion Efforts
The management highlighted the importance of industrial paints, driven by innovation, policy tailwinds, and Kansai's technological edge. The decorative business is expected to recover in the medium term, despite high competitive intensity. KNPL remains confident of stability in the next 1-2 quarters, driven by an improving demand scenario.
Outlook
We expect KNPL to grow at a 7.9% EPS Compound Annual Growth Rate (CAGR) over FY26-28. The company is currently trading at 20.7x FY28 EPS, factoring in most negatives. However, the stock lacks immediate triggers. As a result, we maintain a Retain Accumulate rating with a Target Price (TP) of Rs248, unchanged from our previous recommendation.
Investor Takeaway
Investors should maintain a buy rating for Kansai Nerolac Paints with a target of ₹248.
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