Buy Kansai Nerolac Paints Ltd; target of Rs 600: Kotak Securities
Kotak Securities’s research report on Kansai Nerolac Paints Ltd
We recently interacted with the management of Kansai Nerolac Paints (KNPL) to understand the developments in the company and in the sector.KNPL has been experiencing double digit volume YoY growth across segments since the last 12 quarters surpassing the performance of Asian Paints and Berger. The strong out-performance is on the back of: 1) Strong volume growth witnessed by the paint sector;2) New and innovative product launches by the company; 3) Strong distribution network of the company (20000+ dealers and 102 depots)
For KNPL, we estimate 9% volume CAGR over FY17 – FY20E with stable margins and ROE of ~23.3% and ROCE of ~34.5% for FY20E. Maintain BUY with an unchanged TP of Rs 600 at 44x FY20E earnings.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.