Kansai Nerolac Q3 Results Review - Focus On Driving Margin Expansion: Dolat Capital

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Dolat Capital Report.Kansai Nerolac Paints Ltd.’s Q3 FY23 results were below our estimate on account of extended monsoon and higher channel stocking during the quarter. As the company has high cost inventory which would last till Q1 FY24E, we believe that margins would remain under pressure for next couple of quarters. During the quarter, volume growth was marginally negative in decorative segment and the sales growth was driven by price hikes. Gross margin contracted 80 basis points YoY to 30.4%. However, improved on a sequential basis by 160 bps led by softening in raw material prices. Going ahead, Kansai plans to focus on high margin products which would augment margins. Kansai Nerolac’s Q3 results were below our estimate. Consequently, we have downward revised our FY23E/24/25E earnings per share estimates to Rs 8.9/12.4/14.3 respectively. In the near term, the company would face headwinds related to inflation and lower demand. However, in the long run we believe that the company would grow fast on a favorable base..Click on the attachment to read the full report:.Berger Paints - Transitory Issues Impacted Q3; Cyclical Challenges Emerge For FY24: ICICI Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Kansai Nerolac Q3 Results Review - Focus On Driving Margin Expansion: Dolat Capital

Going ahead, Kansai plans to focus on high margin products which would augment margins.

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