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Firstcall are 'overweight' in Kansai Nerolac Paints

Firstcall India Equity | 11 Apr, 2016  | Follow Author | Add to my Favourites 
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- Kansai Nerolac Paints Ltd (KNPL), a subsidiary of Kansai Paints Co. Ltd., Japan was established in the year 1920. It is the 2nd largest coating company in India and the market leader in Industrial coatings.

- During Q3 FY16, net profit increased by 28.57% and stood at Rs. 844.20 million as against Rs. 656.60 million in the corresponding quarter ending of previous year. Revenue for the quarter increased by 9.10% to Rs. 9680.60 million from Rs. 8873.40 million, when compared with the prior year period.

- During Q3 FY16, EBIDTA is Rs. 1423.90 million as against Rs. 1120.50 million in the corresponding period of the previous year.

- EPS of the company stood at Rs. 1.57 a share in Q3 FY16 against Rs. 12.18 in the corresponding quarter of the previous year.

- The company’s Net sales stood to Rs. 29391.50 million for nine months end of FY16 as compared to Rs. 27342.50 million for nine months end of FY15.

- For the end of 9M FY16, Net Profit increased by 30.30% and stood at Rs. 2753.30 million compared to Rs. 2113.00 million for the end of 9M FY15.

- Net Sales and PAT of the company are expected to grow at a CAGR of 10% and 8% over 2014 to 2017E respectively.


- At the current market price of Rs.281.15, the stock P/E ratio is at 42.79 x FY16E and 38.10 x FY17E respectively.

- Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs. 6.57 and Rs. 7.38 respectively.

- Net Sales and PAT of the company are expected to grow at a CAGR of 10% and 8% over 2014 to 2017E respectively.

- On the basis of EV/EBITDA, the stock trades at 25.15 x for FY16E and 22.71 x for FY17E.

- Price to Book Value of the stock is expected to be at 8.02 x and 6.88 x for FY16E and FY17E respectively.

- Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.


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About Firstcall India Equity

Firstcall India Equity of Firstcall India Equity Advisors Pvt. Limited (FIEA), is a leading financial services provider in India and a SEBI Registered Category-I Merchant Banker. FIEA is a culmination of a credible Equity Research Capabilities, Long Standing Relationship with leading FIIs, DFIs, MFs, Overseas Pension Funds etc. The company’s research caters to the needs of the largest news wire and media houses of the world namely Reuters, Thomson, Capital IQ,, Emerging Markets Euro money Publications-UK. The Company is among the major players in the Debt and Equity markets.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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