Add Kansai Nerolac Paints, target price Rs 625: ICICI Securities

ICICI Securities has add call on Kansai Nerolac Paints with a target price of Rs 625. The current market price of Kansai Nerolac Paints is Rs 562.45.

Kansai Nerolac Paints Ltd., incorporated in the year 1920, is a Large Cap company (having a market cap of Rs 30265.73 Crore) operating in Building Materials sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 1470.50 Crore, down -8.49 % from last quarter Total Income of Rs 1606.86 Crore and up 35.67 % from last year same quarter Total Income of Rs 1083.91 Crore. Company reported net profit after tax of Rs 123.62 Crore in latest quarter.

Investment Rationale
The brokerage models revenue and PAT CAGRs of 15.4% and 16% respectively over FY21-23E. It maintains ADD rating with DCF based TP of Rs625 (47x FY23E). Key risks: continued slow-down due to covid and steep inflation in input prices.

Promoter/FII Holdings
Promoters held 75 per cent stake in the company as of Sept 30, 2020, while FIIs held 4.2 per cent, DIIs 12.1 per cent and public and others 8.8 per cent.