Kansai Nerolac shares hit 52-week high on monetisation of idle land parcels

Kansai Nerolac Paints share price jumped over 9% to hit a 52-week high in early trade on Wednesday after the company approved monetisation of idle land parcels. Kansai Nerolac Paints shares surged as much as 9.2% to 355.00 apiece on the BSE.

In a regulatory filing, Kansai Nerolac Paints said that its board of directors has approved a proposal for monetization of idle land parcels of the company not being put for productive use.

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The company has entered into an agreement for sale with Aethon Developers Pvt Ltd, a subsidiary of Runwal Developers Pvt Ltd, for the sale of its land parcel at Lower Parel together with building thereon, for a consideration of 726 crore. 

The sale is subject to completion of procedures and approvals as may be necessary in this regard, it said.

In the second quarter of FY24, Kansai Nerolac Paints reported a net profit of 175.48 crore, registering a growth of 57.79% from 111.21 crore in the July-September quarter of FY23.

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The company’s revenue from operations in Q2FY24 increased 1.32% to 1,956.54 crore from 1,930.96 crore in the corresponding quarter a year ago. 

Earlier this month, brokerage firm Prabhudas Lilladher retained its ‘Accumulate’ rating on the stock and raised the target price to 370 per share based on 32xSept25EPS, from 351 earlier.

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“Kansai Nerolac Paints has been taking all the right steps, however valuations at 27.2xFY26 are factoring in expected increase in competition and consequent threat to market share and profitability post Grasim’s entry. We believe improving sales traction and profitability in Industrial paints (45% of sales), could be a saving grace for Kansai Nerolac given parent’s strength in Industrial Paints,” Amnish Aggarwal – Head of Research, Prabhudas Lilladher said.

The brokerage estimates 27.9% PAT CAGR over FY23-26 and 13.3% CAGR over FY24-26.

Kansai Nerolac Paints share price has gained over 6% in the past one month, while the stock is up more than 16% year-to-date (YTD).

At 10:45 am, Kansai Nerolac shares were trading 4.74% higher at 340.45 apiece on the BSE.

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Published: 27 Dec 2023, 10:47 AM IST

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