Kansai Nerolac Q4 Results Review — Market Share Gains In Automotive Paints: ICICI Securities

ICICI Securities Report

Kansai Nerolac Paints Ltd. reported strong Q4 FY23 led by-

1. price hikes in industrial paints,

2. benefits of investments in trade and projects business in FY23,

3. strong volume growth in automotive paints,

4. correction in input prices and

5. favorable base.

Kansai Nerolac has gained market shares in all sub-segments of automotive paints and also stepped up the investments in decorative paints. We are also enthused by strong improvement in revenues and profitability of subsidiaries in FY23 which have remained in investment mode over FY20-22.

We believe Kansai Nerolac is doing all the right things to strengthen the competitive advantages. We also model it to realize the benefits in FY24-25 of the investments done in FY22-23.

Correction in input prices will likely provide additional ammunition to invest more in brand building activities. However, we continue to remain cautious on paint sector with entry by Grasim and multiple large players.

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