Shares of Kansai Nerolac Paints spiked 10% on Tuesday’s early trades to reach an intraday high of ₹ 444.20 apiece on the National Stock Exchange (NSE). This happened after the company announced its quarterly and annual results, a dividend and a bonus issue. At 01:34 PM, its shares were trading at ₹ 405.00 apiece. 

Kansai Nerolac’s consolidated net profit jumped 402.03% to 96.24 crores in the January to March (Q4FY23) against ₹ 19.17 crores in the corresponding quarter a year ago. Its revenue from operations surged 12.81% in Q4FY23 to ₹ 1733.59 crores, against ₹ 1536.60 crores in the same quarter last year. 

For the entire year (FY 2022-23), the company’s net profit jumped 36.52% to ₹ 468.47 crores, compared to ₹ 343.15 crores in FY 2021-22. Its revenue from operations increased to ₹ 7542.73 crores, up 18.42% as compared to ₹ 6369.35 crores a year ago. 

The company’s board has considered and approved the proposal for declaration of bonus equity shares in the ratio of 1:2, subject to approval of its shareholders. This means that eligible shareholders are entitled to receive one bonus equity share for every two shares held by them in the company. If approved, these shares will be dispatched within two months from the date of approval, i.e., by July 07, 2023. 

Kansai Nerolac has recommended a dividend of ₹ 2.70 per share or 270% of its face value of ₹1 each for the financial year ended March 31, 2023, subject to approval by its shareholders. The record date to determine the eligibility of shareholders is May 25, 2023. It will be payable on June 30, 2023. 

With a market capitalization of ₹ 21,700 crores, Kansai Nerolac Paints is a mid-cap stock. It has a low return on equity of 8.77% and an ideal debt-to-equity ratio of 0.07. Its shares were trading at a price-to-earnings ratio of 53.62 which is substantially higher than the industry P/E ratio of 16.57, indicating that the stock might be overvalued as compared to its peers. 

Kansai Nerolac has been manufacturing paints for 103 years and is a leader in industrial paints. It has eight strategically located manufacturing units in India with a strong dealer network across the country. 

Written by Simran Bafna 

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