The company has 4 manufacturing facilities - at Lote in Maharashtra, Bawal in Haryana, Jainpur in U.P. and the latest state-of-the-art plant at Hosur in Tamil Nadu. The geographical set up of the plants has been advantageous in providing high service levels and supply chain efficiency. Recently the company inaugurated its new emulsion plant at Jainpur and new polyester resin plant at Lote.

The company has over the years developed a variety of products in order to meet customer demand in the Decorative, Automotive, Auto Refinish, Performance Coating and Powder Coating segments of the market.

September 2016 quarter results

In quarter ended September 2016, sales grew 5% to Rs 1133.75 crore. OPM jumped 300 basis points to 17.5% which saw OP growing 27% to Rs 198.26 crore.

Raw material cost fell 5% to Rs 548.53 crore. As a % of sales, it fell from 53.6% to 48.4%.

Other income jumped 396% to Rs 29.39 crore and interest cost was NIL.

As depreciation grew 1% to Rs 17.17 crore, PBT grew 45% to Rs 210.48 crore.

After providing for taxation (up 47% to Rs 71.17 crore), PAT grew 45% to Rs 139.31 crore.

Six months results

For the six months ended September 2016, sales grew 7% to Rs 2324.37 crore. OPM jumped 250 basis points to 16.6% which saw OP growing 26% to Rs 385.03 crore.

For the six months, raw material cost fell 3% to Rs 1102.84 crore. As a % of sales, it fell from 52.4% to 57.4%.

Other income jumped 333% to Rs 50.48 crore and interest cost was NIL.

As depreciation grew 2% to Rs 34.41 crore, PBT grew 41% to Rs 401.10 crore.

After providing for taxation (up 48% to Rs 135.29 crore), PAT grew 37% to Rs 265.81 crore.

Enjoys strong parent support

The continued technology focus from the parent Kansai Paint Co. Ltd. (which holds 69.27% stake in the company), Japan has helped bring the latest technology products. Based on the excellent track record and new technology offerings, Multiple New OEM Business have been awarded for future business prospects. In addition the company's state-of-the-art Hosur plant is now fully operational and has been approved as a factory of supply by Industrial customers as well.

The company is a leader in Industrial Paints

Kansai Nerolac is the leader in the Industrial Coatings market space and it continues to increase its market share in this space. It has extended its close interaction with customers to the areas of Performance coatings which has helped it increase its market share. The company now serves a vast array of OEM industries with a variety of products.

Complete system capability with advanced technological products introduced over the years has been instrumental in sustaining the leadership for industrial business segment. KNPL has always launched products for customers across various market segments which are innovative and technologically superior.

The industrial team has undertaken the initiative of "Train the customers". The team imparted training, gave colour presentations and also suggested many improvement areas related to painting and safety to Multiple OEMs and Auto ancillaries.

Made inroads in Railways business for coaches and wagons

The company made inroads in Railways business for coaches and wagons. In Performance Coatings Segment, New business and new products were the focus. The company continues to focus on gaining approvals from large buyers of paint. New products like Direct to metal coatings for Industrial application have been introduced. The Company launched Floor Coatings Products during the year with favourable response.

To set up new plants

The company is up a paint manufacturing unit at Sayakha Industrial Estate in Gujarat having capacity of 42000 MT / year, which is expandable in phases, at an estimated cost of Rs 350 crore.

The company will also set up a paint manufacturing unit at Goindwal Sahib near Amritsar in Punjab having capacity of 38000 MT per year, which is expandable in phases, at an estimated cost of Rs. 180.50 crore.

It will also set up a Global R & D Centre at Vashi, Navi Mumbai, at an estimated cost of Rs. 40 crore.

Valuation

The share price trades at Rs 377.