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 Kansai Nerolac Paints Ltd reported a nearly four-fold surge in fourth-quarter profit on Monday, helped by an increase in demand for its decorative paints and a drop in some raw material costs.

The paint maker's consolidated net profit in the quarter ended March 31 rose to 937.7 million rupees ($11.5 million), from 247.3 million rupees a year earlier.

Revenue for the company, owned by Japan's Kansai Paint Co Ltd, rose nearly 13% in the quarter, while its cost of materials consumed fell over 5%.

The company also approved the issue of one bonus share for every two shares. 

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WHY IT MATTERS

Nerolac has reported either a dip in profit or a smaller-than-expected profit growth in three of the last four quarters.

High volatility in crude, which accounts for about 30% of raw material costs, has corrected from its 2022 high of $139.13 per barrel in March last year when it inflated Nerolac's cost of materials consumed to over 18%.

PEER COMPARISON

Valuation (next Estimates (next Analysts' sentiment

12 months) 12 months)

RIC PE EV/EBIT Revenue Profit Mean # of Stock to Div

DA growth growth rating* analysts price yield

target** (%)

Kansai Nerolac 31.30 18.51 11.19 25.85 Buy 12 0.83 0.57

Paints Ltd

Asian Paints Ltd 58.82 38.05 10.60 21.23 Hold 38 0.98 0.66

Berger Paints India 51.33 31.86 11.23 25.73 Hold 23 1.04 0.50

Ltd

Indigo Paints Ltd 41.14 24.61 19.69 24.99 Hold 7 0.96 0.25

* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

JAN-MARCH STOCK PERFORMANCE

GRAPHIC : Kansai Nerolac shares vs peers - https://fingfx.thomsonreuters.com/gfx/mkt/lgvdkgjdmpo/Kansai.png

-- All data from Refinitiv

-- $1 = 81.7850 Indian rupees