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Kansai Nerolac Share Rises 10% on Strong Q4 Earnings, Recommends 1:2 Dividend

Kansai Nerolac shares rose 10% on strong Q4 results and bonus announcements.

Shares of Kansai Nerolac surged 10% to Rs 443.45 on the BSE in intraday trade on Tuesday after the company’s profit after tax (PAT) rose 194% year-on-year to Rs 94 crore on strong operational performance.

The company also announced to give bonus shares at a ratio of 1:2, that is, to give 1 bonus equity share for every 2 shares held in the company, subject to the approval of the general meeting of shareholders.

Also, the board has recommended a dividend of 270% (Rs 2.70 per share) for the financial year ending March 31, 2023, compared to a total dividend of 225% (Rs 2.25 per share) in the previous year.

In the fourth quarter, net revenue rose 13.6% year-on-year to Rs 1,605 crore, driven by recovering demand and new product launches. EBITDA margin improved 363 basis points year-over-year to 9.5%, supported by better operating leverage.

All businesses performed well during the quarter, management said. Inflation has remained positive this year, although raw material prices have softened. Prudent cost management efforts continued. This and various initiatives taken in previous quarters improved gross margins year-over-year and sequentially. Looking ahead, management said it expects demand to remain healthy in the near term.

Regarding industry outlook, Kansai Nerolac said the size of the domestic coatings industry is estimated to be around Rs 70,000 crore by March 2023. Good growth in infrastructure, core industries, and automotive and real estate could positively impact the overall long-term demand for the coatings industry.

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