Kansai Nerolac Q2 Review - Margins Play Spoil Sport: Prabhudas Lilladher
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Prabhudas Lilladher Report
We are cutting our FY22/23/24 earnings per share estimates of Kansai Nerolac Paints Ltd.'s by 8.4%/5.7%/5.7% mainly due to-
increased pressure on gross refining margin’s due to significant input cost inflation and
semiconductor shortage led impact on auto sales may last upto one year.
We are reducing our gross margin estimate of Kansai Nerolac by 260 basis points in FY22 with gradual restoration in FY23/24.
We expect higher price increases in Q3 FY22 and gradual recovery in margins from Q4 FY22, although it may take a couple of quarters for margins to come to normal range of 15-17%.
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