scorecardresearchKansai Nerolac shares gain over 10% after Q4 net profit jumps by a whopping

Kansai Nerolac shares gain over 10% after Q4 net profit jumps by a whopping 402%

Updated: 09 May 2023, 11:21 AM IST
TL;DR.

For the financial year 2022–23, the company's net profit increased by 36.52% to Rs. 468 crore, as compared to Rs. 343 crore in FY22. The company's consolidated revenue from operations also increased by 18.42% to Rs. 7,543 crore in FY23, up from Rs. 6,369 crore in the previous fiscal year.

According to the company, the size of the domestic paint industry is estimated at around Rs. 70,000 crore as of March 2023.

According to the company, the size of the domestic paint industry is estimated at around Rs. 70,000 crore as of March 2023.

Shares of Kansai Nerolac Paints, one of the leading paint companies in India, gained sharply in Tuesday's intraday trade following the release of a strong set of numbers for the March quarter. The paint maker on Monday reported a stellar 402% YoY rise in its consolidated net profit at 96.24 crore for Q4FY23.

The company had posted a net profit of 19.17 crore in Q4 FY22, and in the preceding December quarter, the net profit came in at 109 crore.

The company earned net revenue from operations of 1,734 crore in Q4 FY23, a growth of 12.8% as against 1,537 crore in the same period of the last fiscal. It reported an operating profit of 168 crore in Q4, an increase of 100% when compared to 84 crore in Q4 FY22, while the EBITDA margin came in at 10% in Q4, up 500 basis points (bps) YoY.

For the financial year 2022–23, the company's net profit increased by 36.52% to Rs. 468 crore, as compared to Rs. 343 crore in FY22. The company's consolidated revenue from operations also increased by 18.42% to Rs. 7,543 crore in FY23, up from Rs. 6,369 crore in the previous fiscal year.

Further, for the fiscal year ended March 31, 2023, the Board has recommended a dividend of 270% on a face value of 1 (Rs. 2.70 per share), which is higher than the total dividend of 225% (Rs. 2.25 per share) declared in the previous year.

It has also approved a "proposal for declaration of Bonus Equity Shares in the ratio of 1:2, subject to the approval of the shareholders of the company".

Following the development, the stock got off to a great start in Tuesday's trade at 422.95 apiece and continued to surge in early trade to hit an intraday high of 444.20, an increase of 10.31% compared to the previous closing price of 402.65.

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Stock Price chart of Kansai Nerolac Paints.

Commenting on the results, Mr Anuj Jain, Managing Director, Kansai Nerolac Paints Ltd., said, “During the quarter, all businesses have done well. Though raw material prices have softened for the year, inflation is still positive. Judicious cost management efforts were continued. This, along with various initiatives undertaken in previous quarters, have led to the gross margins improving both over the corresponding quarter last year and sequentially.”

“The company continued with growth initiatives in decorative and performance coating. These initiatives, which are in the area of feet on the street, digital interventions, influencer outreach, new product launches, approvals, and projects, have gathered momentum. The results are encouraging, and these initiatives are being expanded to more cities. Looking forward, demand is expected to remain healthy in the near term,” added Jain.

According to the company, the size of the domestic paint industry is estimated at around Rs. 70,000 crore as of March 2023. The good growth in infrastructure, the core sector, as well as automobiles and real estate, is likely to have a positive effect on the overall demand for the paint industry in the long run, it added.

Kansai Nerolac manufactures a diversified range of products, ranging from decorative paints and coatings for homes, offices, hospitals, and hotels to sophisticated industrial coatings.

20 analysts polled by MintGenie on average have a 'buy' call on the stock.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

 

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First Published: 09 May 2023, 11:21 AM IST