Kansai Nerolac Paints (BSE:500165) - Share price, News & Analysis

Q: What is the Fair Price of 500165 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

500165 (₹370) is trading above our estimate of [[fair value]] (₹120.1)

500165 fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	3/6
Past Performance	1/6
Financial Health	4/6
Dividends	3/6

500165 Stock Overview

Kansai Nerolac Paints Limited manufactures and sells paints and varnishes, enamels, or lacquers in India.

Rewards

Earnings are forecast to grow 24.01% per year

Risk Analysis

Dividend of 0.61% is not well covered by earnings

Profit margins (5.6%) are lower than last year (10.4%)

Kansai Nerolac Paints Competitors

Tata Chemicals

BSE:500770

₹204.5b

Supreme Industries

NSEI:SUPREMEIND

₹224.8b

Carborundum Universal

BSE:513375

₹139.7b

Solar Industries India

BSE:532725

₹246.7b

Price History & Performance

Summary of all time highs, changes and price drops for Kansai Nerolac Paints
Historical stock prices
Current Share Price	₹370.00
52 Week High	₹674.15
52 Week Low	₹358.05
Beta	0.53
1 Month Change	-10.46%
3 Month Change	-20.92%
1 Year Change	-37.75%
3 Year Change	-11.61%
5 Year Change	-16.75%
Change since IPO	5,321.26%

Shareholder Returns

	500165	IN Chemicals	IN Market
7D	-2.0%	0.6%	0.6%
1Y	-37.7%	-3.1%	-0.3%

Return vs Industry: 500165 underperformed the Indian Chemicals industry which returned -3.1% over the past year.

Return vs Market: 500165 underperformed the Indian Market which returned -0.3% over the past year.

Price Volatility

Is 500165's price volatile compared to industry and market?
500165 volatility
500165 Average Weekly Movement	3.4%
Chemicals Industry Average Movement	6.5%
Market Average Movement	6.8%
10% most volatile stocks in IN Market	9.8%
10% least volatile stocks in IN Market	4.4%

Stable Share Price: 500165 is less volatile than 75% of Indian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: 500165's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1920	3,105	Anuj Jain	https://www.nerolac.com

Kansai Nerolac Paints Limited manufactures and sells paints and varnishes, enamels, or lacquers in India. It offers interior and exterior decorative wall paints, wood coatings, metal enamel paints, and ancillary paints, as well as adhesives and waterproofing products; and automotive and powder coatings, performance coatings liquid, auto refinish, primers, wood finishes, and construction chemicals. The company also develops and supplies paint systems used on the finishing lines of electrical components, cycle, material handling equipment, bus bodies, containers, and furniture industries.

Kansai Nerolac Paints Fundamentals Summary

How do Kansai Nerolac Paints's earnings and revenue compare to its market cap?
500165 fundamental statistics
Market Cap	₹199.40b
Earnings (TTM)	₹3.59b
Revenue (TTM)	₹63.69b

55.6x

P/E Ratio

3.1x

P/S Ratio

Is 500165 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
500165 income statement (TTM)
Revenue	₹63.69b
Cost of Revenue	₹44.42b
Gross Profit	₹19.27b
Other Expenses	₹15.68b
Earnings	₹3.59b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 01, 2022

Earnings per share (EPS)	6.66
Gross Margin	30.26%
Net Profit Margin	5.63%
Debt/Equity Ratio	4.9%

How did 500165 perform over the long term?

See historical performance and comparison

Dividends

0.6%

Current Dividend Yield

34%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 500165 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 500165?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 500165. This is calculated by dividing 500165's market cap by their current preferred multiple.
What is 500165's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₹199.40b

500165 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.1x
Enterprise Value/EBITDA	32.3x
PEG Ratio	2.3x

Price to Earnings Ratio vs Peers

How does 500165's PE Ratio compare to its peers?

500165 PE Ratio vs Peers

The above table shows the PE ratio for 500165 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	34.3x
500770 Tata Chemicals	16.3x	13.4%	₹204.5b
SUPREMEIND Supreme Industries	23.2x	6.1%	₹224.8b
513375 Carborundum Universal	41.9x	16.6%	₹139.7b
532725 Solar Industries India	55.9x	23.8%	₹246.7b
500165 Kansai Nerolac Paints	55.6x	24.0%	₹199.4b

Forward PE

Price-To-Earnings vs Peers: 500165 is expensive based on its Price-To-Earnings Ratio (55.6x) compared to the peer average (34.3x).

Price to Earnings Ratio vs Industry

How does 500165's PE Ratio compare vs other companies in the IN Chemicals Industry?

Price-To-Earnings vs Industry: 500165 is expensive based on its Price-To-Earnings Ratio (55.6x) compared to the Indian Chemicals industry average (17.2x)

Price to Earnings Ratio vs Fair Ratio

What is 500165's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

500165 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	55.6x
Fair PE Ratio	28.1x

Price-To-Earnings vs Fair Ratio: 500165 is expensive based on its Price-To-Earnings Ratio (55.6x) compared to the estimated Fair Price-To-Earnings Ratio (28.1x).

Share Price vs Fair Value

What is the Fair Price of 500165 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 500165 (₹370) is trading above our estimate of fair value (₹120.1)

Significantly Below Fair Value: 500165 is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: 500165 is poor value based on its PEG Ratio (2.3x)

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Future Growth

How is Kansai Nerolac Paints forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

24.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 500165's forecast earnings growth (24% per year) is above the savings rate (6.8%).

Earnings vs Market: 500165's earnings (24% per year) are forecast to grow faster than the Indian market (17.3% per year).

High Growth Earnings: 500165's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 500165's revenue (11% per year) is forecast to grow slower than the Indian market (11.5% per year).

High Growth Revenue: 500165's revenue (11% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 500165's Return on Equity is forecast to be low in 3 years time (15.7%).

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Past Performance

How has Kansai Nerolac Paints performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-1.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 500165 has high quality earnings.

Growing Profit Margin: 500165's current net profit margins (5.6%) are lower than last year (10.4%).

Past Earnings Growth Analysis

Earnings Trend: 500165's earnings have declined by 1.6% per year over the past 5 years.

Accelerating Growth: 500165's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 500165 had negative earnings growth (-32.3%) over the past year, making it difficult to compare to the Chemicals industry average (29.1%).

Return on Equity

High ROE: 500165's Return on Equity (8.3%) is considered low.

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Financial Health

How is Kansai Nerolac Paints's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 500165's short term assets (₹32.3B) exceed its short term liabilities (₹13.3B).

Long Term Liabilities: 500165's short term assets (₹32.3B) exceed its long term liabilities (₹2.3B).

Debt to Equity History and Analysis

Debt Level: 500165 has more cash than its total debt.

Reducing Debt: 500165's debt to equity ratio has increased from 1% to 4.9% over the past 5 years.

Debt Coverage: 500165's debt is not well covered by operating cash flow (12.2%).

Interest Coverage: 500165's interest payments on its debt are well covered by EBIT (18.5x coverage).

Balance Sheet

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Dividend

What is Kansai Nerolac Paints's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.61%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 500165's dividend (0.61%) is higher than the bottom 25% of dividend payers in the Indian market (0.42%).

High Dividend: 500165's dividend (0.61%) is low compared to the top 25% of dividend payers in the Indian market (1.86%).

Stability and Growth of Payments

Stable Dividend: 500165's dividend payments have been volatile in the past 10 years.

Growing Dividend: 500165's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (33.8%), 500165's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 500165 is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

2.5yrs

Average management tenure

CEO

Anuj Jain (53 yo)

0.25

Tenure

₹22,861,000

Compensation

Mr. Anuj Jain serves as Managing Director at Kansai Nerolac Paints Limited since April 1, 2022. He serves as Whole-Time Director at Kansai Nerolac Paints Limited since April 01, 2018 and served as its Dire...

CEO Compensation Analysis

Compensation vs Market: Anuj's total compensation ($USD289.69K) is below average for companies of similar size in the Indian market ($USD602.60K).

Compensation vs Earnings: Anuj's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: 500165's management team is considered experienced (2.5 years average tenure).

Board Members

Experienced Board: 500165's board of directors are considered experienced (3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/04 00:00
End of Day Share Price	2022/07/04 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31