KANSAINER - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.2

📊 Core Financials & Profitability

Profitability: Quarterly PAT stands at ₹231 Cr, slightly down from ₹123 Cr, with a minor quarterly profit variation of −4.25%. EPS of ₹12.5 is decent for a ₹253 stock.

Return Metrics

ROE: 10.4% and ROCE: 14.0% — solid, though not exceptional.

Debt Profile: Debt-to-equity at 0.03 — virtually debt-free, offering strong financial resilience.

Dividend Yield: 0.99% — modest, with a ₹3.75/share dividend declared in the past year

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💸 Valuation Indicators

Metric Value Insight

P/E Ratio 31.3 Fairly valued vs. industry PE of 48.7.

P/B Ratio ~3.21 Reasonable relative to book value ₹78.8.

PEG Ratio 1.67 Slightly expensive — growth is priced at a premium.

🔍 Conclusion: Kansai Nerolac is moderately valued with healthy fundamentals. PEG ratio suggests growth is priced optimistically, but not excessively.

🎨 Business Model & Competitive Edge

Core Operations: Kansai Nerolac Paints is a leading player in decorative and industrial coatings, with strong brand equity and distribution reach.

Strategic Strengths

EPS grew 41% annually over the last three years despite a 21% drop in share price

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Consistent revenue and dividend payouts support long-term stability.

Low debt and high delivery percentage (70.84%) indicate investor confidence

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Growth Outlook

Analysts forecast 2025 targets between ₹251 and ₹257, with stop-loss levels around ₹241–₹245

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Technical momentum is bullish, with price above both 25-day and 50-day moving averages

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📉 Technicals & Entry Zone

RSI: 64.1 — slightly bullish, nearing overbought.

MACD: 2.23 — positive momentum.

DMA Levels: Price above both 50-DMA and 200-DMA — medium-term strength.

📌 Suggested Entry Zone: ₹240–₹250 — near support levels and technical reference points.

🕰️ Long-Term Holding Guidance

Hold if Invested: Strong fundamentals, low debt, and brand leadership support long-term value.

Buy on Dips: Prefer entry near ₹245 with a 2–3 year horizon.

Monitor: Margin trends, raw material costs, and decorative segment growth.

You can explore Simply Wall St’s EPS vs. share price analysis, StockPriceArchive’s technical targets, or Stocks-Buy’s valuation breakdown for deeper insights. Let me know if you'd like a peer comparison with Asian Paints or Berger Paints next.

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www.stocks-buy.com

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simplywall.st

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stockpricearchive.com

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