⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
KANSAINER - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | KANSAINER | Market Cap | 18,701 Cr. | Current Price | 231 ₹ | High / Low | 275 ₹ |
| Stock P/E | 28.3 | Book Value | 79.6 ₹ | Dividend Yield | 1.08 % | ROCE | 14.0 % |
| ROE | 10.4 % | Face Value | 1.00 ₹ | DMA 50 | 235 ₹ | DMA 200 | 245 ₹ |
| Chg in FII Hold | -0.44 % | Chg in DII Hold | 0.38 % | PAT Qtr | 137 Cr. | PAT Prev Qtr | 231 Cr. |
| RSI | 46.8 | MACD | 0.31 | Volume | 1,66,724 | Avg Vol 1Wk | 1,58,588 |
| Low price | 218 ₹ | High price | 275 ₹ | PEG Ratio | 1.51 | Debt to equity | 0.03 |
| 52w Index | 23.1 % | Qtr Profit Var | 5.21 % | EPS | 12.6 ₹ | Industry PE | 40.9 |
📊 Core Financials
- Revenue growth: Quarterly PAT declined from 231 Cr. to 137 Cr. (short-term weakness)
- Profit margins: EPS at 12.6 ₹, moderate profitability
- Debt ratios: Very low debt-to-equity at 0.03 (strong balance sheet)
- Cash flows: Supported by low leverage and consistent dividend payout
- Return metrics: ROCE 14.0%, ROE 10.4% (moderate returns)
💹 Valuation Indicators
- P/E ratio: 28.3 (below industry PE of 40.9, relatively attractive)
- P/B ratio: ~2.9 (231 ₹ / 79.6 ₹ book value)
- PEG ratio: 1.51 (fair, suggests valuation aligned with growth expectations)
- Intrinsic value: Current price near fair value, limited margin of safety
🏢 Business Model & Competitive Advantage
- Kansai Nerolac operates in decorative and industrial paints with strong brand presence
- Wide distribution network and partnerships with automotive and industrial clients
- Competitive advantage lies in brand recognition, product quality, and diversified portfolio
- Low debt enhances financial stability and expansion capacity
📈 Entry Zone & Long-Term Guidance
- Entry zone: Attractive near 218–225 ₹ (closer to 52-week low)
- Current price (231 ₹) is below DMA 50 & 200, showing weak momentum
- Long-term holding: Suitable for investors seeking exposure to paints sector, but monitor profit growth
✅ Positive
- Low debt-to-equity ratio (0.03)
- P/E ratio lower than industry average (28.3 vs 40.9)
- DII holdings increased by 0.38%
⚠️ Limitation
- Quarterly PAT dropped significantly (137 Cr. vs 231 Cr.)
- ROE at 10.4% is modest
- EPS at 12.6 ₹ indicates limited earnings strength relative to valuation
📉 Company Negative News
- FII holdings decreased by 0.44%
- Stock trading below DMA 50 & 200, showing weak technicals
- Quarterly profit decline raises concerns on near-term growth
📈 Company Positive News
- DII holdings increased, showing domestic investor confidence
- Strong brand presence in decorative and industrial paints
- Dividend yield at 1.08% provides steady income
🏭 Industry
- Industry PE at 40.9, sector trades at premium valuations
- Paint industry benefits from housing, infrastructure, and automotive demand
- High competition with Asian Paints and Berger, but Kansai Nerolac maintains strong positioning
📝 Conclusion
Kansai Nerolac shows financial stability with low debt and attractive relative valuation. However, recent profit decline and modest ROE limit upside potential. Entry is recommended near 218–225 ₹ for better margin of safety. Long-term investors may hold for steady growth in the paints sector, but near-term caution is advised due to weak technicals and earnings pressure.
Would you like me to also prepare a peer comparison table with Asian Paints and Berger Paints to highlight Kansai Nerolac’s relative strengths and weaknesses?