KANSAINER - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.6

Here’s a comprehensive analysis of Kansai Nerolac Paints Ltd (KANSAINER)

📊 Core Financials

Profitability

ROE at 9.85% and ROCE at 13.0% are modest, indicating average capital efficiency.

EPS of ₹14.1 is decent, but quarterly PAT dropped from ₹168 Cr to ₹102 Cr — a ~39% decline, signaling short-term pressure.

Debt & Liquidity

Debt-to-equity ratio of 0.05 — extremely low, showcasing strong financial discipline and minimal leverage.

Dividend yield of 1.03% adds a small income cushion for long-term holders.

📈 Valuation Metrics

Metric Value Remarks

P/E Ratio 33.1 Slightly below industry average (45.4) — fair valuation

P/B Ratio ~3.05 Based on Book Value ₹79.4 — reasonable

PEG Ratio 1.56 Above 1 — growth not fully justifying valuation

Intrinsic Value ❓ Likely close to current price, but not deeply undervalued

🧠 Business Model & Competitive Edge

Model: Leading player in decorative and industrial paints, with strong OEM relationships in automotive coatings.

Strengths

Diversified product portfolio across decorative and industrial segments

Long-standing brand with strong distribution network

Challenges

Competitive pressure from Asian Paints and Berger

Margin compression due to raw material cost volatility

📉 Technical & Sentiment Indicators

RSI at 40.3 — approaching oversold territory, may signal a bounce.

MACD negative at -1.24 — bearish momentum.

DMA50 and DMA200 above current price — short-term downtrend.

FII and DII holdings slightly up — mild institutional confidence.

🎯 Entry Zone & Long-Term View

Suggested Entry Zone: ₹228–₹235 — near support and RSI levels

Stop Loss: ₹218 (recent low)

Targets: ₹258 short-term, ₹275 medium-term

Long-Term Holding: Suitable for conservative investors. Watch for margin recovery and volume growth in industrial segment.

Would you like a side-by-side comparison with Asian Paints or Berger to explore sector dynamics?

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