Target: ₹232CMP: ₹210.50Kansai Nerolac (KNPL) reported 9.8 per cent year-on-year revenue growth, the highest in the last 12 quarters, driven by high-single-digit growth in decorative and double-digit growth in industrial businesses. Further, in the industrial segment, automative, performance coating and powder coating reported robust growth. Going ahead, the management expects demand to remain healthy despite an erratic monsoon and geopolitical uncertainties. However, growth lagged the market leader, Asian Paints (17.6 per cent).Despite a 5 per cent consolidated price hike, GM and EBITDAM contracted to 35 per cent and 13.8 per cent, respectively, due to an adverse product mix and delayed pricing pass-through in the Industrial business. The management expects margins to improve from Q2FY27E, driven by the full impact of 3 per cent decorative and 3-5 per cent industrial price hikes, while maintaining its FY27E EBITDAM guidance of 13-14 per cent and 14 per cent+ over the medium term.The company continues to deliver healthy topline growth, supported by improving demand across both segments. While margins remain under pressure, the management expects recovery in the coming quarters through the full pass-through of price hikes, though commodity price volatility and macro uncertainties remain key monitorable. We initiate coverage on Kansai Nerolac with an ‘Accumulate’ rating. Valuing the stock at 23x FY28E EPS, we arrive at a target price of ₹232.Published on August 5, 2026