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IDBI Capital Report
Kansai Nerolac Paints Ltd.'s result was above our estimates. Volume growth of 20% plus in decorative is healthy. Industrial coating business grew strongly (Kansai Nerolac gained market share) backed by recovery in auto sector (~30% revenue share for Kansai Nerolac) especially in passenger vehicle driven by easing of chip-shortage issue.
The company enjoys 50% plus market share in auto coating. Positively; Kansai Nerolac has exited many low margin industrial coating businesses like appliance (exited 30% business) etc.
Also, in institutional business the company has increased its focus and reach in metro and tier-I towns and hence could double the business in Q1 FY23.
Kansai Nerolac has achieved its target of 5% salience in waterproofing business. Distribution expansion is tracking well with high double growth.
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