Kansai Nerolac Paints Ltd Q1 FY26 – Colour Me Surprised: Flat Sales, Falling Profits, and Japanese Patience
1. At a Glance
Kansai Nerolac—the paint company that promised to “Paint the Nation” seems to be stuck repainting the same old wall. Q1 FY26 results show revenue growth crawling at 1.8% while profits slipped 4.3%. Meanwhile, Asian Paints is partying like Holi with 25%+ margins. At ₹249 per share and a P/E of 31.5, Nerolac’s colours look a bit faded compared to its glossy peers.
2. Introduction
If the Indian paint market were a Bollywood film, Asian Paints would be the lead hero, Berger the stylish sidekick, Akzo Nobel the foreign cameo, and Kansai Nerolac—the underdog cousin who once had potential but now keeps tripping on its own drop cloth.
Founded back in 1920 as Gahagan Paints, Nerolac has a century-old legacy and the backing of Japan’s Kansai Paints (which owns 75%). You’d think with that pedigree, they’d dominate the walls of India. Instead, they’re clinging to third place in decorative paints while Asian Paints paints over their market share with ease.
Industrial coatings remain their stronghold, especially in auto paints. But here’s the twist: India’s EV revolution and global slowdown in car demand are like someone spilling thinner on their glossy automotive portfolio. Decorative paints, where all the real glamour (and margins) lie, have been more of a struggle—because apparently, India prefers to decorate homes with “Impressions” from Asian Paints, not Nerolac “Beauty Gold.”
So the big question: will Nerolac reinvent itself with Paint+, influencer tie-ups, and fancy IoT-driven factories, or will it continue being that brand you see in TV ads but rarely on your neighbour’s walls?
3. Business Model – WTF Do They Even Do?
Kansai Nerolac makes money in three buckets:
Decorative Paints: Interiors, exteriors, designer, enamel. Basically, the paints you argue over with your spouse at Asian Paints’ Colour World… oh wait, wrong brand. This is where the glamour is, but Nerolac is still playing catch-up.
Industrial Coatings: Automotive paints, powder coatings, performance coatings. They are a market leader here, which is great, except India’s auto OEMs bargain harder than a Lajpat Nagar shopper.
Other Products: Wood finishes, adhesives, waterproofing. Side dishes to the main curry.
On top of that, they’ve tried to look hip with:
Paint+ category—premium products with more shine and less relevance (launched 15+ new products in FY24).
Influencer programs—5,000 architects onboard, because clearly the way to fight Asian Paints is TikTok reels about emulsion.
NxtGen shops & shoppes—because adding “NxtGen” in the name is cheaper than actually innovating.
Question for you: do you even know one person who painted their house because an “influencer” told them to?
4. Financials Overview
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue
2,162 Cr
2,133 Cr
1,817 Cr
1.4%
19.0%
EBITDA
303 Cr
330 Cr
166 Cr
-8.2%
82.5%
PAT
216 Cr
225 Cr
102 Cr
-4.0%
111.7%
EPS (₹)
2.73
2.86
1.34
-4.5%
103.7%
Commentary: Revenue growth looks like it’s on a starvation diet, while PAT decided to do yoga—flexible quarter to quarter, but not really bulking up year on year. Annualised EPS is ~₹10.9, giving forward P/E ~23x. Cheaper than peers, but maybe for a reason.
5. Valuation Discussion – Fair Value Range
P/E Method: EPS (TTM ₹14) × Industry P/E (47.5) → ₹665. But Nerolac is not Asian Paints, so apply discount. Fair range: ₹300–₹450.
EV/EBITDA: EV ~₹20,138 Cr; EBITDA FY25 ~₹942 Cr → 21.4× vs peers at 25–30×. Fair range: ₹260–₹350.
Fair Value Range: ₹220 – ₹400 Disclaimer: This is for educational purposes only. If you treat this like stock advice, please also consult your neighbourhood painter for market timing.
6. What’s Cooking – News, Triggers, Drama
New MD Alert: Anuj Jain retired in April 2025, Pravin Chaudhari took over. Fresh brushstroke, or same old colour? Time will tell.
M&A Drama: Merging subsidiary Nerofix into the parent. Paint business consolidation is never as exciting as it sounds.
