HDFC Securities: Kansai Nerolac - Joined At The Hip With Auto
An employee places a lid on a tin of ready mixed blue paint inside a paints and coatings factory. (Photographer Jasper Juinen/Bloomberg)

HDFC Securities: Kansai Nerolac - Joined At The Hip With Auto

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

HDFC Securities Report

Kansai Nerolac Paints Ltd. No.1 of No. 3 in Industrial/Decorative Paints) remains joined at the hip with auto original equipment manufacturers, which are likely to see their second straight year of 16-18% volume declines (given auto slowdown/Covid-19).

Meanwhile, it has been beefing up its relatively less cyclical non-auto industrial portfolio.

In Decorative, Kansai Nerolac has outpaced bigger rivals over FY15-19, given its aggressive marketing and distribution push.

This trend, however, is unlikely to continue over FY20-23 as the company’s predisposition would likely be to safeguard margins/restrict advertisement and promotion spend amid the demand destruction and until auto recovery is in sight.

Click on the attachment to read the full report:

HDFC Securities Kansai Nerolac Initiating Coverage.pdf

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