1. At a Glance
Kansai Nerolac Paints is that quiet topper in class who dominates industrial coatings but gets ignored in the glamorous decorative paint gossip. As of early February 2026, the company sits at a market cap of roughly ₹18,000 crore with a share price hovering around ₹222. In the last three months, the stock is down about 8%, which tells you the market mood is less “Diwali bonus” and more “salary credited but rent due.”
Q3 FY26 numbers weren’t disastrous, but they weren’t Instagram-worthy either. Revenue came in at ₹1,982 crore, up 3.1% YoY, while PAT slipped sharply by ~18% YoY to ₹154 crore, largely due to margin pressure and an exceptional labour-code-related charge. Operating margins settled around 12%, which is decent for paints but nowhere close to the Asian Paints-style flex.
Despite the short-term pain, the balance sheet remains clean, debt is barely visible, dividend yield is above 1%, and promoter holding is a rock-solid ~75% courtesy Kansai Paint Japan. The big question: is Nerolac just stuck in a cyclical slowdown, or is it structurally losing its mojo in decorative paints?
2. Introduction
Kansai Nerolac is one of those legacy Indian companies that has survived everything—British-era origins, liberalisation chaos, Asian Paints dominance, and now influencer-driven wall-makeover reels. Founded in 1920 (when painting your house was probably a once-in-a-lifetime event), the company has evolved into India’s undisputed leader in industrial coatings, especially automotive paints.
The irony? While industrial coatings pay the bills and earn respect, decorative paints are where valuations get drunk. And that’s where Nerolac keeps getting compared, judged, and occasionally roasted.
Q3 FY26 summed up this identity crisis perfectly. Industrial demand stayed resilient thanks to autos and OEM-linked businesses, but decorative demand remained soft, pricing power was limited, and costs didn’t fully cooperate. Add an exceptional labour-related charge, and suddenly the profit chart looks like it skipped leg day.
So is this a temporary bad patch or a long-term underperformance story? Let’s open the paint can properly.
3. Business Model – WTF Do They Even Do?
In simple terms: Nerolac paints everything that moves… and a lot that doesn’t.
The company operates across three broad buckets. Decorative paints are what retail investors notice—interior walls, exterior walls, waterproofing, wood finishes, adhesives, and all
the “Paint+” jargon meant to sound premium. This is the most competitive and brand-heavy segment, where Asian Paints and Berger throw marketing money like confetti.
Then comes industrial coatings—the real Nerolac stronghold. Automotive OEM coatings, performance coatings, powder coatings, auto refinishes. If a car rolls out of a factory in India, chances are Nerolac has painted at least some part of it. This segment benefits from long-term contracts, high entry barriers, and technical collaborations with global partners.
Finally, there’s the distribution and service model: online NxtGen Paint Service, offline NxtGen Shoppes, Paint+ corners, B2B outreach across 75+ cities, and influencer-driven architect and designer programs. In FY24 alone, Nerolac connected with over 5,000 architects and scaled influencer programs to 250+ cities.
In short, the company isn’t confused—it just operates in two very different worlds. One values branding and emotion, the other values chemistry and consistency.
4. Financials Overview
Key Quarterly Comparison (₹ crore)
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 1,982 | 1,922 | 1,954 | 3.1% | 1.4% |
| EBITDA | 240 | 235 | 215 | 2.1% | 11.6% |
| PAT | 154 | 187 | 133 | -17.8% | 15.8% |
| EPS (₹) | 1.50 | 2.31 | 1.67 | -35% | -10% |
Yes, the YoY PAT drop looks ugly. But QoQ recovery hints that the worst might be behind. EBITDA margins improved sequentially, suggesting cost pressures may be stabilising.
EPS Annualisation
Average EPS of Q1, Q2, Q3 × 4
= (2.73 + 1.67 + 1.50) / 3 × 4 ≈ ₹7.87
At ₹222 share price, recalculated P/E ≈ 28.2x, slightly below the industry average but not exactly cheap.
So, are margins coming back or just teasing us? What do you
