Revenue and Profit Growth Trends
Over the seven-year period ending March 2025, Kansai Nerolac’s net sales expanded from ₹5,424 crores in March 2019 to ₹7,823 crores in March 2025, reflecting a compound growth trend with notable acceleration post-2021. The total operating income mirrored this growth, maintaining a close alignment with net sales figures, as other operating income remained nil throughout.
Operating profit before depreciation, interest, and tax (PBDIT) excluding other income showed a mixed pattern, peaking at ₹1,028 crores in March 2024 before a slight dip to ₹942 crores in March 2025. However, inclusion of other income bolstered operating profit to over ₹1,080 crores in the latest fiscal year. Profit before tax rose significantly from ₹697 crores in March 2019 to ₹1,478 crores in March 2025, despite a dip in 2023, indicating strong operational leverage and cost management.
Profit after tax (PAT) followed a similar trajectory, increasing from ₹448 crores in 2019 to ₹1,109 crores in 2025, with a temporary slowdown in 2023. Earnings per share (EPS) reflected this growth, rising from ₹8.40 in 2019 to ₹14.14 in 2025, underscoring enhanced shareholder value over the period.
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Cost Structure and Margins
The company’s raw material costs have risen in line with sales, reaching ₹4,572 crores in March 2025 from ₹3,405 crores in 2019. Purchase of finished goods and employee costs also increased steadily, reflecting expansion and inflationary pressures. Other expenses climbed from ₹927 crores in 2019 to ₹1,309 crores in 2025, indicating higher operational activities and investments.
Operating profit margins excluding other income have moderated from a high of 17.0% in 2021 to 12.1% in 2025, suggesting margin pressures possibly due to rising input costs or competitive pricing. Gross profit margins similarly declined from 17.3% in 2021 to 21.5% in 2025, with some volatility in between. PAT margins have fluctuated, peaking at 15.1% in 2024 before easing to 14.2% in 2025, still reflecting healthy profitability relative to industry peers.
Balance Sheet and Financial Position
Kansai Nerolac’s shareholder funds have grown robustly from ₹4,053 crores in 2021 to ₹6,423 crores in 2025, supported by rising reserves and retained earnings. The company’s total liabilities increased proportionately, reaching ₹8,217 crores in 2025, with a manageable debt level of ₹118 crores, down from ₹203 crores in 2022, indicating prudent leverage management.
Net block of fixed assets expanded steadily, reflecting ongoing capital expenditure and capacity enhancement. Current assets rose significantly to ₹5,352 crores in 2025, driven by higher current investments and inventories, supporting operational liquidity. The book value per share improved from ₹50.14 in 2021 to ₹79.46 in 2025, signalling enhanced net asset value for shareholders.
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Cash Flow and Liquidity
Cash flow from operating activities has shown improvement over the years, reaching ₹672 crores in 2025 from ₹595 crores in 2020, despite some volatility. Investing activities have consistently been cash outflows, reflecting ongoing capital investments, with ₹378 crores spent in 2025. Financing activities have also been net outflows, indicating debt repayments and dividend distributions.
Net cash inflow/outflow has been mixed, with a negative ₹72 crores in 2025 following a positive ₹64 crores in 2024. Closing cash and cash equivalents stood at ₹29 crores in 2025, down from ₹101 crores the previous year, suggesting tighter liquidity but still adequate for operational needs.
Summary
Overall, Kansai Nerolac’s historical performance reflects a company that has steadily expanded its revenue base and profitability while maintaining a solid balance sheet and manageable debt levels. Margins have experienced some pressure in recent years, but the firm’s ability to generate consistent cash flow and grow shareholder equity remains a positive indicator for investors. The company’s strategic investments and operational efficiencies will be key to sustaining growth in a competitive paints market.
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