Kansai Nerolac Paints hosted its Q3 FY26 Earnings Conference Call on February 4, 2026, discussing results for the quarter ending December 2025. Management noted strong demand in automotive and industrial segments, with decorative business showing recovery post-Diwali. Key focus areas include premiumization, maintaining an EBITDA guidance of 13% to 14%, and significant investments in R&D and dealer networks.
Q3 FY26 Conference Call Overview
The conference call for Kansai Nerolac Paints Limited’s Q3 & 9 Months FY ’26 Earnings was held on February 04, 2026. Senior management present included Mr. Pravin Chaudhari (Managing Director), Mr. Yash Ahuja (CFO), and Mr. Jason Gonsalves (Director – Corporate Planning, IT and Materials). The call was moderated by Mr. Aniruddha Joshi from ICICI Securities.
Business Environment and Highlights
The quarter saw robust demand for automotive products, fueled by GST cuts and infrastructure focus, despite a shorter festive season and geopolitical conflicts. Key highlights include:
- Decorative Segment: The Paint+ group contributed greater than 10% to the overall decorative business. The project and institutional business showed double-digit growth. The dealer network expanded, adding 3,500 dealers as of December 2025.
- Innovations: Launched products like Excel Everlast 20 (20 years performance) and water-based Excel Total Floor Coat.
- Industrial Segment: Strong demand in general industrial, driven by construction equipment. Launches included BTX-free metallic monocoat for 4-wheelers and low-bake epoxy CED black for commercial vehicles.
- Branding: The ‘Ghar Ki Raunak’ campaign was extensively run, leveraging a modernized iconic jingle.
ESG and Financial Performance
Management highlighted commitment to ESG principles:
- KNP was rated in category ‘B’ for climate change and water security by CDP Cycle 2025.
- Rated in the top 12 percentile in the chemical industry group in the S&P Global ESG Index 2025.
Financial Metrics (Q3 FY26)
On a standalone basis for the quarter:
- Net Revenue growth was 3.5%.
- PBDIT saw a marginal growth of 0.2%.
- PBT before exceptional items was down by 3.7%.
On a consolidated basis for the quarter:
- Net Revenue was up by 3.1%.
- PBDIT was up by 2%.
- PBT before exceptional items was down by 3.7%.
Outlook and Guidance
The outlook remains positive, expecting sustained momentum in construction and automotive segments. Management articulated caution regarding risks like commodity volatility and currency depreciation.
EBITDA Guidance
Pravin Chaudhari confirmed that the company maintains its EBITDA guidance of 13% for Q3 and intends to keep the range between 13% to 14% going forward, driven by investments in manpower, dealer connectivity, and premium mix improvement.
Decorative Segment Mix
Management noted that the volume-value gap in decorative is nearly nil, indicating successful focus on premium, high-margin products rather than low-margin items like putty, which may involve higher discounting.
Q&A Insights
Competitive Intensity
Competition remains intense. Regarding the recent AkzoNobel and JSW merger, management stated they are observing how the merging entity deploys resources. The intensity is seen across manpower deployment, dealer discounting, and investment in influencer marketing.
Industry Growth Rates
The management does not believe the paint sector has reached peak penetration comparable to industries like toothpaste or hair oil. They see a significant runway for growth, especially as the decorative mix shifts toward pure-play emulsion, which should increase the per kg price realization.
Subsidiaries Performance
Subsidiaries like Nerofix are performing well, showing higher double-digit growth in both retail and industrial segments, with significant profitability improvement. Nepal continues to perform well, while Bangladesh remains under stress due to upcoming elections.
Source: BSE
