Kansai Nerolac Q1 FY26: ₹2,087 Cr Revenue, Profits Flat – Paint Still Wet on the Turnaround Wall
1. At a Glance
Kansai Nerolac (KNPL) Q1 FY26 results? Think of a fresh coat of paint on an old wall – it looks okay, but the cracks are still peeking through. Revenue rose slightly to ₹2,087 cr, but EBITDA dipped 6.7% and PBT fell 4.1%. ROE is below double digits, and growth remains a stubborn 1% TTM. The stock trades at a P/E of 32.6x, while competitors like Asian Paints flaunt 61x.
2. Introduction
Kansai Nerolac Paints Ltd, a household name in industrial coatings and decorative paints, is currently riding a slow-moving roller coaster. Once considered the “Asian Paints challenger,” KNPL now struggles to regain lost sheen. With Japanese parent Kansai Paints’ support, tech upgrades continue, but the market isn’t impressed with single-digit returns and muted growth. Q1 FY26 offered cautious optimism, not fireworks.
3. Business Model (WTF Do They Even Do?)
Decorative Paints: Revenue driver, but faces brutal competition.
Industrial Coatings: Stronghold with OEMs (auto & appliances).
Technology Edge: Backed by Kansai Japan for innovation.
Geographic Focus: India, Sri Lanka (recent ₹9 cr investment), and selective exports.
Roast: Their business is like a wall primer – essential, but nobody notices unless the top coat (sales growth) shines.
4. Financials Overview
Revenue (Q1 FY26): ₹2,087 cr (+1.4% YoY)
EBITDA: ₹312 cr (↓6.7% YoY)
PAT: ₹216 cr (↓4.1% YoY)
EPS (Q1): ₹2.73
ROE (FY25): 9.85%
ROCE (FY25): 13%
Commentary: Cost pressures and muted demand keep margins under check, while other income (₹53 cr) continues to play savior.
5. Valuation
a) P/E Method
EPS TTM ₹14.0, CMP ₹244 → P/E 32.6x. Peers: Asian Paints 61x, Berger 57x. Fair Value (P/E 28–32x) → ₹200–₹230.
